The Malaysia-based International Islamic Liquidity Management Corp (IILM) has reshuffled its sharia board, losing four of its original six members including senior Saudi and Qatari scholars, according to the body's website. The IILM, backed by the central banks of nine countries as well as the Jeddah-based Islamic Development Bank, was founded in October 2010 to help develop cross-border markets in Islamic financial instruments.
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Management of the International Islamic Liquidity Management Corp (IILM) is meeting this week to try to minimise delays to the issue of its first sukuk, a source close to the programme said on Tuesday. The official, who cannot be named as he is not authorised to speak publicly to media, said the meeting would discuss regulatory treatment of the sukuk, the last remaining hurdle before issuance. International Islamic Liquidity Management Corp (IILM) faces a delicate task as it designs its maiden sukuk: it must make the issue attractive enough for investors to buy, but not so attractive that most of them buy to hold. Whether it gets the balance right will affect the development of Islamic money market trading in the Gulf and South-East Asia over the coming year. Saudi Arabia has left the International Islamic Liquidity Management Corp (IILM), which is preparing to launch its first long-delayed sukuk or Islamic bonds since its inception in 2010, the IILM said late on Wednesday. IILM did not give a reason for Saudi Arabia's exit. The central banks of Qatar and Malaysia bought out Saudi Arabia's share. Regulators, scholars and simple economics are pressing Islamic banks in the Gulf to diversify their money market transactions, a trend which could spur growth of the region's financial markets. Islamic money market assets have expanded rapidly in the last few years along with the rise of sharia-compliant banking. International Islamic Liquidity Management Corp., backed by a group of central banks located mainly in Asia and the Middle East, will launch its first sukuk of $300 million to $500 million "in a matter of months", its chief executive said. Kuala Lumpur-headquartered IILM, established last year, aims to issue short term sukuk, or Islamic bonds, to help sharia-compliant banks manage liquidity and create a liquid cross-border market for Islamic instruments. A recent Islamic Finance Industry Leaders Round Table Discussion has pointed out that as Islamic banks are generally more liquid than their conventional counterparts, Islamic banks end up earning lower returns on short-term investments. The forum, hosted by KPMG Sri Lanka and addressed by Neil Miller, KPMG’s Global Head of Islamic Financial Services who is an International expert in the field of Islamic Finance however highlighted that this is because there are fewer short term liquidity management options available to them to manage their surplus liquidity. A new organization in Malaysia, the Association of Shari'ah Advisors in Islamic Finance (ASAS), led by Aznan Hasan, the president of the organization and a prominent Shari'ah scholar, is developing an accreditation program including testing financial literacy. This is an important step for the industry because, while there are rules in some countries about the qualifications for Shari'ah scholars, they are not consistent internationally, and there is not currently a way for scholars to demonstrate their qualifications in finance. |