Islamic Finance & The Role Of SWIFT

Transcription

1. Islamic Finance & The role of SWIFT Vision To cater to unique Islamic transactions in Islamic and Conventional banks, as well as conventional transactions within Islamic banks. Who Islamic banks + Conventional banks offering Islamic products What SWIFT can support the Islamic financial market in two ways: •  Provide conventional banking services to Islamic banks •  Develop new services catering to unique Islamic financial transactions When Ongoing: •  Business as usual for conventional banking services •  Murabaha message promotion •  Exploration of further Islamic message requirements (MT3xx) underway Where Middle East and Malaysia (90% of market) How Community engagement: •  Business as usual Account Management •  Industry association engagement: AAOIFI, SCM and AIBIM •  Sharia compliance endorsement from AAOIFI •  Promote at Sibos, Regional Conferences, Industry Conferences SWIFT & Islamic Finance : 12th Ameda Meeting, Libya 30 Nov 2010
2. SWIFT & Islamic Finance Today •  240 Islamic banks on SWIFT –  84% of Sharia assets –  44 million messages in 2009 •  Use SWIFT for: Tomorrow •  Re-use ISO standards to include Islamic products •  First is Murabaha –  Commodity based money market deposit –  Payments –  60% of all Islamic financing –  Foreign Exchange –  Cat 5 messages with Rulebook –  Securities –  Funds –  Trade Finance –  Cash Management •  “Interest” in some messages is an issue – exploring solutions •  Need for Islamic derivatives message standard SWIFT and Islamic Finance is not new. We are simply building on the existing relationship, to bring standardisation and automation to Islamic financial products. SWIFT & Islamic Finance : 12th Ameda Meeting, Libya 30 Nov 2010
3. Murabaha Flow Example Customer Bank Broker A Master Agreement Money Transfer (MT 202) Purchase Request (MT 502) Seller’s Offer (MT 502) Purchase Acceptance (MT 515) Notice of Sale (MT 515) Notice of Intent (MT 502) Purchase Acceptance (MT 509) Form of Offer (MT 515) Sale Acceptance (MT 509) Seller’s Request (MT 502) Purchaser Offer (MT 502) Seller’s Acceptance (MT 515) Deferred Money Transfer (MT 202) SWIFT & Islamic Finance : 12th Ameda Meeting, Libya 30 Nov 2010 Broker B
4. AAOIFI Certificate – SWIFT Murabaha SWIFT & Islamic Finance : 12th Ameda Meeting, Libya 30 Nov 2010
5. Going Forward Murabaha •  Rulebook available – download from www.swift.com/IslamicFinance •  AAOIFI approved •  Promote amongst Islamic users •  Working with Partners to ensure automation (SWIFTReady Label for 2011) New Areas •  Define requirements for: –  FX, Money Market Deposit, Derivatives confirmations (Cat 3) –  Corporate Actions, Sukuk settlement messaging (Cat 5) •  Will obtain AAOIFI Sharia endorsement for each new initiative Community Engagement •  One to one engagement with Islamic users •  AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) •  Conferences: Engage industry via attendance / speaking at Islamic Finance conferences •  Establish an IMPG (Islamic Market Practice Group)? –  Is there interest from AMEDA members? SWIFT & Islamic Finance : 12th Ameda Meeting, Libya 30 Nov 2010
6. Thank you John Falk Director , Securities Market Infrastructures SWIFT Avenue Adele 1 B-1310 La Hulpe Belgium T D F M E W +32 2 655 31 11 +32 2 655 34 61 +32 2 655 37 52 +44 777 15 12 952 john.falk@swift.com www.swift.com SWIFT & Islamic Finance : 12th Ameda Meeting, Libya 30 Nov 2010