IIFM Holds Industry Consultation on Sukuk StandardizationPress Release21 Apr 2014 08:36 am
Dubai, United Arab Emirates, Sunday 21st April 2014 - Bahrain based international standard-setting body, the International Islamic Financial Market (IIFM) organized an industry consultative meeting on "Sukuk Standardization (Structures, Documentation & Guidelines)". The meeting was hosted by Dubai International Financial Centre (DIFC) at its Conference Centre and was attended by a diverse group of experts which included a number of regulators, renowned Shari'ah scholars, senior representatives from Islamic financial institutions, local & international law firms, accounting firms, consultants, rating agencies, multilateral developments institutions (International Monetary Fund, Islamic Development Bank Group etc) and other representatives from the industry.
In the past few years, Islamic financial market has witnessed enormous growth in Sukuk issuances from sovereigns, supranational Institutions, financial institutions and corporates covering many jurisdictions. As Sukuk issuance accelerated, with it, developed number of different structures that were used to construct Shari'ah complaint Sukuk. This in turn has brought its own complexities and understanding between the issuers, investors, traders, lawyers and regulators. For the industry to continue its growth, it needs to take steps to bring about clearer understanding with documentation and product standards, guidelines, best business practices and transparency, while strengthening and streamlining the Shari'ah approval processes.
The objective of this industry consultation was to discuss how the industry, given the facts of Sukuk rapid growth, needs to move forward through embarking on creating standards. In order to maintain the high level of confidence, transparency and global Islamic market unification, the development of IIFM Sukuk standards (Structures, Documentation and Guidelines) will play a major role in the orderly and sustainable development of the Sukuk market.
Chirag Shah, Chief Strategy and Business Development Officer at DIFC Authority, commented: "There has been a clear shift towards Shari'ah compliant offerings over the last year, in line with His Highness Sheikh Mohammed bin Rashid Al Maktoum's initiative towards establishing Dubai as a leading Islamic Economy. At DIFC, we continue to support the growth of the Islamic Finance pipeline by creating a business environment conducive for these activities and collaborating on events, such as the IIFM consultative meeting, to encourage discourse from industry experts on the topic."
Ijlal Ahmed Alvi, Chief Executive Officer of IIFM, said that the purpose of the consultative seminar was to seek views and recommendations of experts on key issues highlighted in the concept paper presented by IIFM concerning various Sukuk structures particularly Ijarah, Mudarabah, Wakalah, Musharakah and Convertible/Exchangeable Sukuk in line with IIFM comprehensive standard development process as per its mandate.
The discussion was led by honorable Shari'ah scholars namely Shaikh Dr. Nizam Yaquby, Shaikh Prof. Dr. Yousef Al Shubaily, Shaikh Esam Mohammed Ishaq, Shaikh Dr. Mohamad Akram Laldin, Shaikh Dr. Muhammad Imran Usmani and Dr. Eltigani Abdelgadir Ahmad as well as IIFM in-house Shari'ah Head Dr. Ahmad Rufai. The deliberations provided clear roadmap to IIFM on developing guidelines and standardization of Sukuk Al Ijarah structure on a priority basis.
The role of IIFM in organizing this consultation was appreciated by the attendees. The issues highlighted in the concept paper and deliberations will assist, not only in bringing improvement in Islamic Capital Market, but will also assist the global unification efforts of IIFM and other infrastructure institutions.
Mr. Alvi on behalf of IIFM Board of Directors thanked DIFC for hosting the consultation and the participants for their support, active participation and expert guidance on the Sukuk structures and related issues to be developed by IIFM in bringing further standardization in Sukuk.