The Islamic Republic of Iran has been admitted as a member of the International Islamic Financial Market (IIFM). The admission of Iran, a major player in Islamic finance, is expected to provide a major boost to the IIFM, whose mission is to create and develop an international market of Islamic financial instruments by promoting and facilitating cross-border investment activity.
The membership of the Central Bank of Iran was approved at the fifth meeting of the Board of the IIFM, which is based in Bahrain. The meeting was held recently in Bahrain, at the IIFM headquarters. It was chaired by Chairman of the IIFM, DM Qureshi. Iran’s membership also includes representation on the IIFM Board.
The IIFM Board comprises top officials from monetary authorities and central banks of Bahrain, Brunei, Indonesia, Malaysia and Sudan, as well as the Islamic Development Bank. The Board also includes several market players, which are Abu Dhabi Islamic Bank, Kuwait Finance House, Shamil Bank of Bahrain, Bank Islam and El-Nilein Industrial Development Bank Group.
Since the Islamic Revolution in 1979, Iran’s economy and financial system have been functioning in compliance with Shari’a precepts. More recently, Iran has introduced ‘participation certificates’, which are a substitute for interest-bearing bonds.
The board meeting also approved an agreement between the IIFM and Malaysia’s Labuan International Financial Exchange (LFX), an offshore financial exchange. The IIFM and LFX are to sign a memorandum of understanding (MoU) to facilitate the listing and trading of Islamic financial instruments.
The IIFM plans to sign similar protocols with other stock markets, including the Bahrain Stock Exchange. The protocols are in line with a main objective of the IIFM to enhance cooperation between member countries.
The IIFM is also planning to organize a series of workshops in major Islamic financial markets, to enhance awareness about Islamic financial instruments and the importance of an Islamic capital market to the global Islamic banking industry.
The IIFM was established in April 2002 through a multilateral effort. The main mission of the IIFM is to create an environment that would encourage active trading of Shari’a-compatible instruments among Muslim countries and among Islamic and conventional financial institutions. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
