By Simon Miller
The International Organisation of Securities Commissions (IOSCO) and the Islamic Financial Services Board (IFSB) hosted a roundtable on Islamic capital markets this morning to begin development of international standards for the growing markets.
The hosts said that the roundtable represented a "significant step towards the development of international regulatory standards and best practices relating to the disclosure requirements for Islamic capital market products" and said the growing recognition of the increasing significance of the Islamic capital market, especially in view of rising cross-border transactions, "triggered the need for stronger oversight, greater transparency and more robust disclosure requirements".
Speaking after the roundtable in Kuala Lumpur, Malaysia's Securities Commission chairman and IOSCO board member Datuk Ranjit Ajit Singh commented: "As the Islamic capital market expands and becomes more global, it is increasingly important that issues surrounding investor protection and market integrity are addressed from a cross-jurisdictional perspective."
He added: "It is therefore critical for regulators and standard-setters such as the IFSB and IOSCO to further examine disclosure regimes for Islamic capital market products, with a view to allowing more informed investment decision-making and to promote the further growth of the Islamic capital market."
Jaseem Ahmed, secretary general of IFSB, emphasised that promoting cross-border financing and investment through Islamic finance is critical to attaining the depth and scale in Islamic capital markets needed to be competitive.
“This will require the adoption of robust regulatory and disclosure practices that give confidence to investors and consumers alike. IFSB hopes that this collaboration with IOSCO will facilitate a process leading to a set of practices that could be harmonised or mutually agreed upon,” he said.