The International Islamic Financial Market (IIFM), a Bahrain-based standard-setting body, and the International Capital Market Association (ICMA) have launched a joint initiative to standardise documentation for Sharia-compliant repurchase agreements (repos) to resolve long-standing liquidity hurdles in Islamic finance.
The organisations signed a memorandum of understanding to develop the IIFM/ICMA Islamic Repo (I’aadat Al Shira’a) Master Agreement. The project seeks to replace fragmented regional practices with a unified framework modelled after the widely used Global Master Repurchase Agreement (GMRA).
The standardisation project is designed to provide Islamic financial institutions worldwide with reliable tools for short-term funding while reducing operational costs and Sharia complexities.
Yusuf Battiwala, a partner at Norton Rose Fulbright, has been appointed as legal counsel to lead the drafting phase. Upon completion, the standards will be supported by an explanatory memorandum to assist market participants with global implementation.
“By combining ICMA’s global expertise with IIFM’s Sharia leadership, we are creating a framework that facilitates efficient liquidity management,” said Dr Ahmed Rufai, acting chief executive of the IIFM.
Bryan Pascoe, chief executive officer of the ICMA, said the move would bring “legal certainty and operational efficiency” to Islamic repo activity as local capital markets continue to internationalise and deepen.
The initiative is expected to strengthen the resilience of the Islamic finance sector by integrating it more closely with global capital market infrastructure.
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