Bahrain’s IIFM may issue global guidelines for Islamic bonds

The International Islamic Financial Market, the Bahrain-based organization seeking to set standards for Islamic securities, may issue new global guidelines to facilitate the sale of Shariah-compliant bonds, an official at the industry body said.“There is no one, cross-border, common benchmark for sukuk,” IIFM’s Chief Executive Officer Ijlal Ahmed Alvi said in an interview in Dubai last week. “When there is a problem or a restructuring possibility, there is no precedent.”

Regulators around the world, including Bahrain and Malaysia, are looking for ways to better evaluate risks of Islamic banks, bonds and make products suitable for investors globally. Malaysia’s central bank on March 24 said it plans to issue standardized principles for Shariah-compliant contracts such as those used in real-estate and project financing to improve oversight.Islamic finance is the fastest-growing segment of the global financial system and sales of Islamic bonds may rise 24 percent to $25 billion this year, CIMB Group Holdings Bhd., the top underwriter last year, said on Feb. 3. Islamic law, or Shariah, bans the payment of interest and stipulates agreements be based on the transfer of goods or services.