The program, which is by far the best of its kind and which is firmly on the Islamic Capital Markets training map, is organized every year by the Securities Industry Development Corporation (SIDC), the training and development arm of the Securities Commission Malaysia (SC).
The theme of this year's 3-day program convened at the Securities Commission Malaysia (SC) headquarters could not be more pertinent: “The Role of Regulation in Overcoming Challenges in Developing Islamic Markets”. In many emerging markets the regulatory and legal infrastructure to facilitate the introduction of capital market products including Sukuk are either nascent or non-existent.
In fact, this is many respects hindered the wider development of the sukuk market for instance and confined it largely to the safer economies of the GCC countries, Malaysia and Singapore. In tandem with the above gap has been a lack of awareness and knowledge of Islamic capital markets instruments and structures by the very regulators, who often have a serious lack of resources for training and education in what is still considered a peripheral sector even in most Muslim countries.
Not surprisingly, IMP, which attracts a number of Treasury officials, is aimed at helping participants to analyze the philosophy and fundamentals of ICM and to distinguish between its various products; to evaluate Islamic equity, sukuk and derivatives as alternatives means of financing and investment to conventional products; and to assess the significance and essentials of corporate governance, risk management and sound regulation in promoting Islamic markets.
The past decade, stressed a statement from the organizers, has seen Islamic finance grow by more than 14 percent per annum and the estimated value of Islamic financial assets now exceeds $1 trillion. "This is a remarkable performance given the contraction in conventional finance over the past four years and the difficulties experienced recently in the Middle East. Islamic finance has also succeeded in penetrating non-traditional markets such as Hong Kong, United Kingdom, Germany, Australia and France, presenting participants in Islamic finance with new market opportunities and potential. The fact that Islamic markets do not prohibit participation by non-Muslims creates potentially unlimited opportunities to widen and diversify its range of products and services," added the statement.
Nevertheless, despite this rapid growth, Islamic finance still accounts for less than one percent of global financial instruments. There are still sections in the global Islamic markets that are not fully explored by issuers, market professionals and investors. But before Islamic finance realizes its undoubted potential, several challenges must be overcome.
These challenges, according to the SC, include the sometimes unclear tax and regulatory frameworks, low levels of consumer knowledge about Islamic finance principles, inadequate human capital development within the industry, insufficient choice of products and instruments backed by liquid secondary markets as well as incomplete harmonization of Shariah principles for speedy cross-border product recognition and acceptance. In the above context and given the rapid development of the ICM over the last three years, market education and knowledge especially of Islamic Capital Markets (ICM) products and structures becomes a competitive advantage
The 6th IMP was opened by Zainal Izlan Zainal Abidin, executive director, ICM, Securities Commission Malaysia, and the course director is Wan Abdul Rahim Kamil Wan Mohamed Ali, ICM consultant to the commission.
The three-day course spanned several topics including “An Overview of the Development of Malaysian Islamic Capital Markets: Regulations, Structure & Products”; “The Ideal Regulatory Framework to Promote Growth in Islamic Finance: International Perspective”; “Global Challenges in Developing Islamic Markets”; “Global Challenges in Developing Islamic Markets”; “Building Blocks for Sustainable Islamic Markets”; “Innovation: Moving Away from Conventional Product Risk”; “AAIOFI Standard: Risk Framework from Global Perspective”; “Role of Shariah Advisory Board: Compliance, Transparency and Shariah Risk”; “International Islamic Liquidity Management: Strengthening the Foundation for Islamic Markets Transactions”; “Islamic Structured Products: Prospects & Challenges”; “Growing Islamic Finance: Awareness, Education and Talent Development”; and “Islamic Market Forum: Malaysia's Way Forward From Regulatory”.
Course lecturers spanned the industry from regulators, academics, Shariah advisories and market practitioners. They included Mohd Radzuan Tajuddin, head, Islamic Capital Market, SC; Kamarudin Hashim, senior general manager and head, corporate finance & investments, SC; Professor Volker Nienhaus, visiting professor, University of Reading, United Kingdom; Nurdin Ngadimon, general manager, Islamic Capital Market, SC; Mohamad Zakariya Othman, head Islamic ratings, RAM Rating Services Bhd; Zairulnizad Shahrim, associate director, AmIslamic Berhad; Khairul Nizam, assistant secretary general, Accounting and Auditing Organization For Islamic Financial Institutions (AAOFI); Ahcene Lahsasna, lecturer, Shariah and Legal Studies Department, International Centre for Education in Islamic Finance; Rafe Haneef, CEO, HSBC Amanah Malaysia Berhad; Aznan Hassan, associate professor, International Islamic University Malaysia; Daud Vicary Abdullah, global leader of Islamic finance at Deloitte; Megat Hizaini Hassan, partner, Lee Hishammudin Allen and Gledhill; Ahmad Hizzad Baharuddin, director, Islamic Banking and Takaful, Bank Negara Malaysia; Hisham Abdul Rahim, head of Islamic product development, BNP Paribas; Faiz Azmi, global Islamic finance, PricewaterhouseCoopers; and Noraizat Shik Ahmad, assistant general manager, Islamic Capital Market.
Since its inauguration in 2006, over 200 participants from 27 countries all over the world have partaken in the program, which comes under the Malaysian Technical Cooperation Program, through which Malaysia shares its development experiences and expertise with other developing countries.
According to SIDC, the growth of the ICM products and services in Malaysia over the last decade or so has been dramatic for both financing and investment. But to accelerate growth of the ICM, human capacity building must be accorded high priority in its development efforts. "The ICM industry needs to be equipped with a new breed of innovators, regulators, intermediaries and risk managers with the right blend of capital market knowledge and understanding of Shariah principles. Furthermore there is a pressing need to enlarge the pool of human capital in the areas of Islamic finance, legal, accounting and risk management," explained SIDC.
