Bismillahirrahmanirrahim

Mr. Khalid Hamad,
Chairman of the International Islamic Financial Market,

Mr. Ijlal Ahmed Alvi,
Chief Executive Officer of the International Islamic Financial Market,

Distinguished Guests,

Ladies and Gentlemen,

Assalaamu’alaykum Warahmatullahi Wabarakatuh and good morning.

It is a great honour for me to welcome you all to this Islamic Financial Markets Seminar, jointly organised by the International Islamic Financial Market (IIFM) and Labuan International Business and Financial Centre (Labuan IBFC). The seminars and workshops organised by the IIFM in various jurisdictions internationally have attracted significant interest from its members and the industry. It is a privilege that today’s seminar is held here in Kuala Lumpur. These intellectual discourses provide an excellent opportunity to create greater awareness and enhance our understanding on the standardisation efforts spearheaded by the IIFM. We hope that this seminar will open the gateway for increased collaboration and new opportunities to propel the Islamic financial services industry to a higher level of development for the benefit of all stakeholders.

Ladies and Gentlemen,
Alhamdulillah, Islamic finance continues to grow rapidly, transcending beyond geographical boundaries and becoming more entrenched in the global financial system. In a span of only ten years, global Islamic financial assets increased markedly from USD800 billion to USD2.4 trillion in 2017 while total sukuk outstanding increased from USD55.3 billion to reach USD376.6 billion in the first half of 2017. Islamic assets under management more than doubled from USD47 billion to USD117 billion in 2017. Islamic finance has also expanded its scope into newer growth areas which among others include supporting green, ethical and environment-friendly development projects, financing international halal trading business, funding international infrastructure projects and strengthening liquidity management and capitalisation of Islamic financial institutions in line with latest regulatory enhancements. In addition, Islamic finance has begun to engrave its footprints in the FinTech space such as equity crowdfunding and peer-to-peer financing platforms. Islamic finance, with its inherent stability features and ethical dimensions, is increasingly being recognised as a more equitable model that would foster financial stability and sustainable growth, whilst preserving the environment and improving socio-economic landscape.

Ladies and Gentlemen,
Against this backdrop, the role of IIFM as an international standard-setting organisation in developing unified Islamic financial contracts and product standards for the capital and money market, corporate finance and trade finance segments of the industry will become more critical. Thus far, the standards published by the IIFM has brought benefits to the industry by reducing legal and Shariah compliance related costs, strengthening risk management capabilities, increasing efficiency, promoting Shariah harmonisation and encouraging legal reforms. These standards are not only utilised by financial institutions which are active in Islamic finance markets in the GCC, Africa, Asia and Europe but also by the regulators as reference for providing Shariah-compliant facilities to Islamic financial institutions in their respective jurisdictions.

IIFM’s standardised agreements also provide Islamic financial institutions with globally recognised cross border liquidity management and hedging tools that will help them to mitigate risks associated with cash flow management, currency fluctuations and rate of return mismatches. The ability to hedge market risks and manage liquidity are both paramount for the continued growth and internationalisation of Islamic finance.

Looking forward, the IIFM is well positioned to build on this track record to focus on bringing standardisation in other areas such as Islamic syndication documentation, gold related wholesale products and agreements as well as additional Islamic foreign exchange and commodity hedging and investment products. Standardisation will elevate efficiency and transparency as well as promote trust and confidence to drive the Islamic finance industry to a higher level of maturity.

Islamic financial institutions can therefore derive significant advantages from being members of the IIFM and adopting its standards. We hope more Islamic financial institutions would join the IIFM and play an active role in deliberating and shaping the standards being developed by the IIFM. Together we can work hand in hand to achieve the vision of the IIFM to create a robust, transparent and efficient Islamic financial market through standard Shariah based financial contracts. This would contribute to a stronger and more vibrant Islamic financial services industry that would bring about a more balanced and equitable growth not only for the Muslim ummah but for the global community as a whole.

Lastly, let me quote one verse in Surah Ali-Imran, verse 104, where Allah SWT says “And let there be (arising) from you a nation inviting to (all that is) good, enjoining what is right and forbidding what is wrong, and those will be the successful.

Insha Allah, I believe that can apply to IIFM. I wish you a productive seminar ahead and look forward to constructive engagement and outcomes. For the international delegates, welcome to Malaysia, enjoy and have a memorable stay in Kuala Lumpur.

Thank you and Wassalaamu’alaykum Warahmatullahi Wabarakatuh.