Welcome Remarks by Mr Ng Nam Sin Asst Managing Director MAS at IIFM Industry Seminar
H.E. Dr Halim Alamsyah, Deputy Governor, Bank Indonesia
Mr Khalid Hamad Abdul-Rahman Hamad, Chairman of the International Islamic Financial Market & Executive Director – Banking Supervision, Central Bank of Bahrain
Ladies and Gentlemen, good morning
I am pleased to be with you this morning at the industry seminar by the International Islamic Financial Market (IIFM). I would like to extend a warm welcome to the IIFM Board of Directors. We are honoured that the IIFM has decided to once again hold their Board meeting in Singapore.
The importance of IIFM’s work cannot be understated. Compared to the banking sector, work on the Islamic money and capital markets are still evolving. We are familiar with the issues and challenges. There is presently no Islamic equivalent to the international money markets that can help Islamic financial players to better manage their liquidity and risk. Sukuk issuances had reached a record high in 2012. However, the increased volume of issuance is still insufficient to meet the huge demand for (i) Islamic assets for investment and (ii) by Islamic financial institution to manage their liabilities. Within the Islamic capital markets there is also a need to broaden the range of Islamic capital market products available to address various investment and financing needs. We hope the seminar today will generate greater awareness of the work of the IIFM in addressing Islamic financial risks and hedging requirements, its documentation standards, as well as Islamic liquidity management.
MAS has undertaken a host of initiatives to create a conducive environment for Islamic financial activities to grow in Singapore. Our fundamental approach is to level the playing field between Islamic and conventional finance as many of the same risks can be found in both. We therefore look through the form of Islamic products and assess the economic substance and risks involved. Since 2004, we have provided clarifications for an increasing number of Shariah-compliant financing arrangements permitted under our regulatory framework. We have also worked with the industry and other government agencies to ensure that Islamic financial players and end-users are not disadvantaged in terms of taxation.
In response to these initiatives, the range of Islamic financial products available in Singapore has expanded beyond Shariah-compliant credit facilities to capital market instruments such as Sukuk and REITs as well as innovative funds under management. There has been a steady issuance of sukuks to-date and we are aware there are more in the pipeline. While some of you are already familiar with and are engaged in these activities, others here may still be new and assessing what is suitable for your institution. We are fortunate to have many eminent and leading industry practitioners among us this morning. I urge you to take advantage of this opportunity to raise questions and engage these experts. It is through such industry gatherings that we can move Islamic finance forward.
I wish you a rewarding discussion ahead. Thank you.