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Sunday, 23 September 2012

Joint halal-Islamic finance sector will create a combined industry worth US$3.5 trillion

KUALA LUMPUR: An integration between the halal sector and Islamic finance will create a combined industry worth US$3.5 trillion as compared to US$2.35bil if they were to be developed independently of each other, said Edbiz Consulting Ltd United Kingdom chairman Dr Humayon Dar.
Speaking to delegates at the Global Islamic Finance Forum 2012 (GIFF), Dr Humayon said the actual combined amount of both halal industry and Islamic finance worked out to be US$2.35bil but the integration actually worth more at US$3.5bil due to the greater potential following the synergy.
GIFF 2012, themed “Internationalisation of Islamic Finance: Bridging Economies”, is hosted by Bank Negara.
“The halal industry will be looking for financial capital. Its size will become more noticeable if combined with Islamic banking,” he explained, citing that “one plus one is more than two”.
“These two industries have developed independently although the denominator is Muslims,” he said.
He also said that the combined sector should be regulated as the halal industry was not as highly regulated compared to Islamic banking. Halal products include food, pharmaceuticals and cosmetics.
“This would bring integrity to the halal industry and Islamic finance,” he added.
He suggested the Islamic finance sector to lead the regulation of the combined platform due to the nature of the industry, which had already been highly-regulated.
Thomas Reuters United States global director (Islamic finance) Rushdi Siddiqui said the focus of Islamic finance should be the products and services instead of the religion.
He proposed for the private sector to lead and fund the regulation while the government supported the initiative.
“Islamic finance has to fit into the existing regulatory environment and not the other way round,” he said.
The speakers also noted that different countries have different frameworks in terms of compliance. It is best for one to study the suitability of the model locally before deploying the framework.
Rushdi said indigenous authenticity was important to bring about financial inclusion.
“The world is looking for a new class of asset management ... information intermediation has to be efficient and the process is the most important,” he said.
KFH Research Ltd managing director and vice-chairman Baljeet Kaur Grewal noted that there was vast potential in takaful products, which currently accounted for only 0.8% of global Islamic assets.
Islamic banking contributed 80.9% to Islamic finance assets worldwide, sukuk 13.5% and Islamic funds 4.5%, she said.

(The Star Online 20 Sep 2012)

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Centre for Islamic Wealth Management launched in Malaysia

INCEIF, BNP Paribas inaugurated the Centre for Islamic Wealth Management. The launch was held on the side lines of GIFF (Global Islamic Finance Forum) 2012. Malaysia is a nation that seeks to become an internationally recognised hub for Islamic wealth management. The research centre is located on INCEIF s Campus in Kuala Lumpur.
BNP Paribas Malaysia CEO Krishna Chetti and INCEIF President and CEO Daud Vicary Abdullah exchanged the Memorandum of Agreement (MoA) to commemorate the launch witnessed by BNP Paribas Malaysia Berhad Chairman Dato Abdullah Mat Noh, BNP Paribas Malaysia Board Member En. Halim Bin Din, Deputy CEO of BNP Paribas Investment Partners APAC, Vincent Camerlynck and INCEIF Board Member Rozali Mohammed Ali.
BNP Paribas is honoured to be a part of this landmark collaboration with INCEIF which reaffirms our commitment to Malaysia. Through this research centre, BNP Paribas hopes to contribute towards the growth of the Islamic Finance sector in Malaysia and the region, as Malaysia is a strategic hub for BNP Paribas Islamic Banking business in Asia-Pacific, said Krishna Chetti, Chief Executive Officer, BNP Paribas Malaysia.
In June 2012, BNP Paribas Malaysia launched its Islamic banking window under the Najmah brand, complementing our existing Islamic finance activities in Asset Management and international banking in Malaysia. We are serious and committed to build a solid base in Kuala Lumpur, with a strong focus on cross border. To succeed, talent development is crucial and we are looking forward to making a contribution to the industry, he added.
The research centre will carry out researches and developments in the area of Islamic wealth management, asset management and capital markets. The centre aims to be a catalyst of innovation in the nascent area of Islamic wealth management by enhancing the knowledge and know-how of players, including practitioners, Shari ah scholars, students, investors and the public, towards the development of a wider and diversified range of financial products and solutions.

(Equities.Com / 22 Sep 2012)

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Need to enhance and harmonise disclosure requirements in the Islamic capital market

The Islamic Financial Services Board (IFSB) and the International Organisation of Securities Commissions (IOSCO), two global standard-setters in their respective fields, collaborated with the Securities Commission Malaysia (SC) to organise a high-level roundtable in Kuala Lumpur, themed “Disclosure Requirements for Islamic Capital Market Products”.
The roundtable represents a significant step towards the development of international regulatory standards and best practices relating to disclosure requirements for Islamic capital market products. 
“As the Islamic capital market expands and becomes more global, it is increasingly important that issues surrounding investor protection and market integrity are addressed from a cross-jurisdictional perspective.  It is therefore critical for regulators and standard-setters such as the IFSB and IOSCO to further examine disclosure regimes for Islamic capital market products, with a view to allowing more informed investment decision-making and to promote the further growth of the Islamic capital market,” said Datuk Ranjit Ajit Singh, Chairman of the SC, who is also an IOSCO Board member and the Vice-Chair of the IOSCO Emerging Markets Committee.
Jaseem Ahmed, Secretary General of IFSB, emphasised that promoting cross-border financing and investment through Islamic finance is critical to attaining the depth and scale in Islamic capital markets needed to be competitive. “This will require the adoption of robust regulatory and disclosure practices that give confidence to investors and consumers alike.  IFSB hopes that this collaboration with IOSCO will facilitate a process leading to a set of practices that could be harmonised or mutually agreed upon,” he said.
David Wright, Secretary General of IOSCO said, “The recent financial crises highlighted the importance of sound disclosure regimes in mitigating systemic risk and building confidence in the financial markets. Given the tremendous growth of the Islamic Finance industry - an increasingly important segment of the global financial markets – it is essential to achieve greater harmonisation in disclosure requirements across jurisdictions where Islamic capital market products are offered.” 
Participants of the closed-door roundtable also discussed the importance of effective disclosure requirements in facilitating greater cross–border Islamic capital market activities, analysed the risks and challenges arising from inadequate disclosures in the area of Sukuk and Islamic Collective Investment Schemes and identified potential approaches which can be adopted by standard-setters, regulators and market participants alike.
The roundtable, held at the Securities Commission today, was attended by senior regulators, international institutions, academia and leading market practitioners from 16 jurisdictions.
(C.P.I Financial / 18 Sep 2012)

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