IIFM intensifies standardisation efforts to support Islamic businesses

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The Ministry of Finance building where the AMBD is headquartered. Image: Ridhwan Kamarulzaman

BANDAR SERI BEGAWAN

Bahrain-based standard-setting body International Islamic Financial Market (IIFM) will introduce new financial standards to further sprout and support Syariah-compliant businesses across its member countries, including Brunei.

Autoriti Monetari Brunei Darussalam (AMBD) said in its statement that the new standards would relate to trade finance and Islamic bond documentations, aiming to allow small businesses more access to transactions generated by larger institutions.

The new standards are also expected to cut cost and time associated with Sukuk issuances upon their publication next year, the central bank said.

The development of these new standards was among the issues discussed at the recent IIFM Board of Directors meeting in Bahrain, which was attended by representatives of its founding members; the Central Bank of Bahrain (CBB), Bank Indonesia (BI), Central Bank of Sudan (CBOS), AMBD and the Islamic Development Bank (IDB).

The founding members agreed that IIFM needed more exposure to implement its standards, despite the increasing adoption rate from active Islamic financial market players across the globe.

IIFM agreed to start translating its standards to other languages including French, Indonesian and Turkish to improve its reach; with members now collaborating with their local consultants and training institutes to provide training materials on IIFM standards.

IIFM will also be hosting several awareness seminars and roundtables, supported by regulators in Bahrain, Kuwait, UAE and Malaysia, as well as those from different jurisdictions by next year.

Other initiatives include the development of standardized gold related documentation to be used by financial institutions active in Syariah-compliant gold business in collaboration with relevant international bodies.

The IIFM is a standard-setting body of the Islamic Financial Services Industry (IFSI) focusing on the standardization of Islamic financial contracts and product templates relating to the Capital and Money Market, Corporate Finance and Trade Finance segments of the IFSI.

It was established in 2002 as a neutral and non-profit infrastructure development institution, the collective efforts of IDB, AMBD, BI, Bank Negara Malaysia (delegated to Labuan Financial Services Authority) and CBB.

The Bruneian