ISDA/IIFM TMA Key Quotes from IIFM Shari'ah Scholars & Board Members

Quotes form IIFM Shari'ah Advisory Panel:

Shaikh Nizam Yaquby: “IIFM and ISDA have done a great service to the Islamic Financial Institutions by this document. This is the second standard document issued by IIFM and it is the right example to follow in future documentations. The amount of time, efforts, and resources put to achieve this standard document will only be appreciated by those who understand the difficult and complex discussions and research phases that this document was subjected to. Congratulations IIFM and keep up the good job!”

Shaikh Esam Mohammed Al Shaikh Ishaq: “This ISDA/IIFM Tahawwut Master Agreement has been the end result of a long and difficult process, in which meetings between scholars, practitioners and others took place for a period of over three years. The process was arduous, involving tight-rope walking, navigation on many Shari’ah issues and concerns, while keeping in mind the interests of the industry simultaneously. I pray Allah blesses this document with proper understanding and implementation by all involved. This document is definitely an addition of great value to Islamic Finance & Banking.”   

Shaikh Dr Mohammed Daud Bakar:  “Risk management or hedging which is compliant to Shari’ah principles is a must in Islamic finance industry. Standard documentation on this aspect by IIFM is not only timely but also evidence that standardization is always possible in this young and promising industry. This ground breaking achievement will be the start of many more institutional achievements.”
 
Shaikh Dr Mohammed Burhan Arbouna: “This Islamic hedging document is a milestone for the Islamic banking and finance industry. The birth of this document shows the flexibility of Islamic legal principles to attend to the need of societies as they conduct daily commercial activities according to the tenets of Islam. The document has passed through an extensive scholarly discussion and scrutiny for the past few years, the reason being to ensure that the mechanisms employed in the hedging industry are fully agreed upon by the majority of the IIFM Shari’ah Advisory Panel. We wish that this document will shape the road for other developments in the Islamic banking and finance industry.”

Qotes from IIFM Board Members:

Dato’ Azizan Abdul Rahman, Director General, Labuan Offshore Financial Services Authority (LOFSA): “The global financial crisis has underscored the importance of sound risk management, primarily related to hedging transactions. The Tahawwut Master Agreement provides the needed consistency and predictability to ensure deep and liquid international Islamic financial markets. Such standardization initiative undertaken by IIFM is a testament to the greater convergence in Shari’ah interpretations of universal recognition and acceptance. Labuan FSA will continue to support and provide impetus towards such endeavors.”

Farhan Al Bastaki, Executive Director, Islamic Finance, DIFC Authority: “DIFC is very happy to have been associated with the development of the Tahawwut Master Agreement. We are keen to promote and support initiatives that drive standardization in the Islamic finance industry. As DIFC evolves further into a global hub for institutional finance and a gateway for capital and investment in emerging markets, Islamic finance is one of the key sectors we are focusing on. The Tahawwut Master Agreement will help in boosting the growth of the Islamic financial services industry and the development of the Islamic capital & money markets across the world.” 

Afaq Khan, Chief Executive Officer, Standard Chartered Saadiq: “This is a great accomplishment as this will allow Islamic banks to offer end-to-end solutions to their customers and it will allow better treasury risk management tools for Islamic financial institutions to competitively manage the market risks. Standard Chartered Saadiq is proud to have been part of the development of this market standard and will continue to play a positive and proactive role in industry development initiatives.”

Naveed Khan, Managing Director, ABC Islamic Bank: “It is encouraging that the IIFM are launching this ground breaking initiative, which will not only provide the market with an essential tool for hedging but will also remove the current disadvantage experienced by Shari’ah-compliant customers versus their conventional competitors. That they can do it in a way that carries the blessings of a regulatory authority which is interested in enhancing industry benchmarks and standards is also really remarkable. ABC Islamic Bank is proud to have been associated with the IIFM as a part of this initiative.”

Lilian Le Falher, Executive Manager, Treasury & Financial Institutions, Kuwait Finance House:  “Hedging products are becoming mainstream products for Islamic financial institutions. Too often, transactions in our industry face delays in their execution due to the lack of standardization. The ISDA/IIFM Tahawwut Master Agreement will provide practitioners with an appropriate and globally recognized legal framework for hedging transactions.”