The objective of the MOU is to set a framework for greater co-operation between LFX and IIFM to pave the way for both organisations to jointly develop an Islamic Capital Market with an enhanced global reach.
Among others, the MOU is set to promote the following:
- development of channels of communications & exchange of information
- collaboration in the listing and active secondary trading of Islamic financial instruments.
"The signing of the MOU between LFX and IFM is a significant development in enhancing the position of LFX as an international financial exchange that could bridge the requirements between Europe, Middle-East and Asia in Islamic financial instruments.
"In this respect, LFX is truly unique as an international financial exchange that is committed and prepared to enhance the use of Islamic financial instruments in international investment for all investors.
"To date, LFX has a range of Islamic financial instruments comprising 3 Sukuk (Islamic notes) amounting to USD750 million (RM2.85 billion)," Mohd Azlan said.
Abdul Rais said the MOU will expand the exchange of information and experience, not only between LFX and IIFM, but between the capital markets of Malaysia and the Middle-East relating to investment in Islamic financial instruments.
"Representatives from the Malaysian capital market and those of the Middle-East have been working together all these years in promoting an Islamic capital market.
"Thus, this MOU is a formalisation of sorts for enhanced dialogues, exchange of feedback and ideas, as well as joint efforts to further develop and promote Islamic financial products and services in reaching investors interested in Islamic investment from different regions of the world.
"This is indeed a most exciting beginning in the development and growth of a truly global Islamic capital market," Abdul Rais said.
In May 2003, LFX had also signed an MOU with the Bahrain Stock Exchange (BSE) with a similar objective to further jointly promote and develop the Islamic capital market leading to the dual and/or secondary listing of instruments on both exchanges. A positive outcome of the MOU is the secondary listing of the Malaysian Government USD600 million Sukuk Al-Ijarah on the BSE in September 2003, following an earlier secondary listing on the LFX in September 2002. These secondary listings on BSE, are expected to be reciprocated in the near future with listings of Bahraini Sukuk on the LFX.
Headquartered in Bahrain, the IIFM became fully operational on 1 April 2002. The founder members of the IIFM are Bahrain, Brunei Darussalam, Indonesia, Malaysia, Sudan and the Saudi based Islamic Development Bank (IDB), all of which have representatives on the Board of the IIFM. Malaysia is represented in the IIFM Board by the Labuan Offshore Financial Services Authority (LOFSA) and Bank Islam (M) Bhd.
By playing a pivotal role in creating an environment that will encourage cross-border trading of Syariah compliant instruments, the IIFM's principal objective is to develop an active international financial market based on Syariah rules and principles.
As a web-based exchange at www.lfx.com.my, LFX offers market participants and investors around the world, fast and efficient access to its services.
Wholly owned by the Kuala Lumpur Stock Exchange, LFX is an international offshore financial exchange that facilitates the listing of a multitude of multi-currency instruments and allows the issuer the flexibility to structure the instruments that best suit their funding needs.
