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Wednesday, 10 September 2014

Malaysia: SWIFT rulebook to enable STP in Islamic finance

Along with the Association of Islamic Banking Institutions Malaysia (AIBIM) and the Malaysian Islamic financial community, SWIFT is launching a new rulebook for the use of SWIFT MT messages for Islamic finance.

The rulebook will provide greater clarity around SWIFT MT message usage based on Islamic principles in order to enable straight-through processing (STP), improving efficiency as well as reducing risk and cost.

SWIFT MT will provide an efficient platform for exchanging Islamic finance messages and further promote the usage of message standards.

"Globally, the growing interest in Islamic finance as a viable alternative to conventional finance has heightened awareness of the need to adopt international standards to automate paper-based Islamic finance operations," says Kiyono Hasaka, standards specialist for Asia Pacific at SWIFT.

"With SWIFT's growing presence in Southeast Asia, we are well positioned to act as an enabler to bring the financial communities together, define market practice and automate Islamic finance processes using international messaging standards."

The SWIFT Asia Pacific team has been working in closely with the Malaysian Islamic financial community to develop STP-enabled financial messaging specific to the requirements of Islamic financial institutions since 2013.

Yusry Yusoff, executive director of AIBIM, said: "This initiative marks a significant development in furthering the level of efficiency for Islamic finance transactions particularly, in ensuring compliance to Shariah requirements."
The SWIFT Islamic Financial Rulebook will be available to the Message User Group by the end of 2014.

(Asset Servicing Times / 09 September 2014)
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Oman to float OMR200m sukuk issue by early next year

Muscat: Oman government has assigned a specialised institution to structure the country's first sovereign Islamic bond or sukuk issue, which may be floated by early next year, the country's central bank chief told Times of Oman. The Sultanate plans to raise OMR200 million by way of a sukuk issue.

"The government is studying issuing sukuk and have also invited some specialised institutions who are knowledgeable in structuring sukuk issues," Hamoud Sangour Al Zadjali, executive president of the Central Bank of Oman (CBO) said, on the sidelines of 'Technology Evolution and Banking Conference' organised by Bank Muscat here on Tuesday. 

He said the issue may be floated by early next year, if not by the end of the current year. "It (the issue proceeds) will be used for funding some of the projects," added the CBO chief.

Oman government earlier formed a working committee to issue sovereign sukuk, in a move to fund infrastructure projects in the near future. The committee members were from the Ministry of Finance, CBO and Capital Market Authority (CMA) and they are now discussing various aspects of raising funds by way of a sovereign sukuk, which is generally asset backed.

The purpose of the sukuk issue is to deepen the financial market in the Sultanate. In fact, it will enable the Islamic banking institutions and the windows to invest some of their excess liquidity in a secured instrument.

Al Madina Investment last year arranged the first corporate sukuk in the Sultanate for Tilal Development Company (TDC). This sukuk, with an issue size of OMR50 million, was based on the Ijarah structure.

(Times Of Oman / 09 September 2014)
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