IIFM (International Islamic Financial Market) and BAFT (Bankers Association for Finance & Trade), announced today the release of their joint initiative of creating global master participation agreements to support the development of Islamic Trade Finance business.
The IIFM-BAFT Master Participation Agreements (IIFM-BAFT MPA’s) consist of two separate standardized framework documentation to cater for Shari’ah-compliant Unfunded and Funded participation arrangements for Trade Finance transactions.
“Trade finance plays an important role in the global financial system and for Islamic finance it presents a huge opportunity which the market participants must avail. The IIFM-BAFT Master Participation Agreements, like previous IIFM Standards, will provide greater transparency, cost and time efficiency, legal certainty as well as Shari’ah harmonization which in turn will contribute in creating more active Islamic Trade Finance business,” said Khalid Hamad, Chairman of IIFM.
Tod Burwell, President and CEO of BAFT said that Islamic trade has become an important transaction stream in many markets. He added:
“By standardizing the framework for Shari’ah-compliant participation arrangements relating to trade, we hope that transaction execution will become easier and trade will continue to facilitate economic growth in these markets.”
IIFM and BAFT acknowledge the support of The Waqf Fund (Bahrain) for providing financial assistance grant in the development of these important standard documentations which is helping in the sustainable development of Islamic finance industry.
The templates will be made available to members of each organization through their respective websites.
Source Salaam Gateway