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Islamic Finance Rulebook launched by SWIFT

Islamic Finance Rulebook launched by SWIFT

(29 June 2015 – Hong Kong) SWIFT, in collaboration with The Association of Islamic Banking Institutions Malaysia (AIBIM) has announced the launch of a new rulebook for the purpose of promoting message standards in the Islamic banking and finance market.

The Islamic finance rulebook has been developed in response to the growing significance of the Islamic banking and finance market.

It aims to provide greater clarity around the usage of Shariah-compliant MT messages in order to expedite market harmonisation and increase Straight-through Processing (STP) to improve efficiency and reduce risks and cost.

“With the growing internationalisation of Islamic finance, the rulebook marks a significant milestone in our collaborative efforts,” said Kiyono Hasaka, Standards specialist, Asia Pacific.

“Automation of Islamic finance confirmation flows is now possible through the adoption of international MT messaging standards.”

“The future ambition is to automate flows end-to-end covering all major Islamic finance practices”.

Since 2013, the Asia Pacific Standards team at SWIFT has been working in close cooperation with AIBIM to develop STP-enabled financial messaging specific to the requirements of Islamic financial institutions.

The SWIFT Islamic finance rulebook will continue to evolve as the Islamic financial industry continues to meet the evolving business needs in the global financial arena.

The future of the rulebook is to include all practices that use Islamic financial instruments, such as previously developed SWIFT Murabahah solution (cost-plus-sales contract), Mudarabah (profit sharing) and Sukuk (Islamic bonds).

“The collaboration between SWIFT and AIBIM has resulted in a concise guideline that would facilitate our members to further enhance their efficiency.

“We look forward for other Islamic financial institutions in other jurisdictions to utilise this solution as well,” said Yusry Yusoff, chief executive/executive director of AIBIM.

The SWIFT Islamic Finance rulebook was endorsed by Shariah Advisory Committee of AIBIM and adopted by AIBIM council.

It will be available to the Message User Group (MUG) in July 2015.

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