Wednesday, 30 December 2009

DIFC unveils Sharia-backed hedging agreement

The Dubai International Financial Centre (DIFC) hosted a meeting of the Sharia Advisory Panel of the International Islamic Financial Market (IIFM) to obtain guidance from scholars and to explain the benefits of its Tahawwut (Hedging) Master Agreement.

The agreement provides a framework and mechanism on hedging or risk management transactions that can be undertaken by the Islamic finance industry. It has been developed by the IIFM jointly with the International Swaps and Derivatives Association (ISDA).

The DIFC meeting focused on the key features and mechanics of the Tahawwut documentation, which the IIFM and ISDA have developed in consultation with market participants and under the guidance of the IIFM Sharia Panel.

Farhan Al Bastaki, Executive Director, Islamic Finance, DIFC Authority, said "...few have realised that a more stable, asset-backed and efficient system already exists. Islamic finance has withstood the negative impact of the global financial crisis."END

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