mifc.com - Governors of OIC Central Banks Recommend Role of Islamic Finance in Promoting Growth and a Diversified Financial SectorThe Meeting of Central Banks and Monetary Authorities of the Organisation of Islamic Cooperation (OIC) Member Countries was held at Sasana Kijang in Kuala Lumpur on 16 November 2011.
The meeting, which was organised and hosted by Bank Negara Malaysia in collaboration with the Statistical, Economic and Social Research and Training Centre for Islamic Countries (SESRIC) agreed that it was important to build a diversified, progressive and inclusive financial sector including exploring the role of Islamic Finance in achieving these objectives. ...
... Ireland is one of the major hubs for cross-border fund distribution. Irish funds are sold in 70 countries across Europe, the Americas, Asia and the Pacific, the Middle East and Africa. At the end of 2010, assets under administration by the industry in Ireland amounted to EUR 1.8 trillion. (source)
On 23 November 2011, the Embassy of Ireland in Malaysia hosted a road show by the Irish Funds Industry Association (IFIA) and representatives of the international fund industry in Ireland. The IFIA supports and complements the development of the international funds industry in Ireland, ensuring it continues to be the location of choice for the domiciling and servicing of investment funds. Irish Development Authority (IDA) articulated the many benefits which included compelling track records, low tax regime and world class talent offered by Ireland for investment funds.
The Irish delegation was led by Mr. John Bruton, the former Prime Minister of Ireland and EU Ambassador to the United States. The successful half-day interactive programme, customised by His Excellency Declan Kelly, the Ambassador of Ireland to Malaysia, granted collective benefits to the MIFC initiatives, the Securities Commission Capital Market Plan and the Malaysian asset managers. The programme also interfaced with CIMB-Principal Islamic Asset Management (CIMB-Principal Islamic) as the first Malaysian-based global asset management house to optimise the Irish Funds global business model.
In support of the MIFC initiative, CIMB-Principal Islamic is establishing an Islamic Dublin Fund platform via the Irish Funds platform. After interactive discussions with the Securities Commission Malaysia (SC) and Bank Negara Malaysia (BNM), the core takeaway was to build a long-term partnership in financial services between Ireland and Malaysia through an industry working group. This industry working group will potentially comprise Irish and Malaysian industry players. The proposed initiatives for this working group will include broadening the support framework for a long-term sustainable Islamic funds business, under the tax regime of the Irish International Financial Services Centre.
Whilst Malaysia has more than 200 Islamic funds at present, Malaysian asset managers are largely focused on the domestic market. Thus, this initiative should provide a platform for the Malaysian fund managers to venture internationally.
The aim of this seminar is to resolve two concerns for international investors in:
- tracking the fund performance on a daily net asset value basis once it is on this premier league platform. After the funds establish a track record of 3 – 5 years, it is hoped that global institutions, pension houses, sovereign wealth funds and central banks will appoint Malaysian-registered fund managers to manage segregated mandates.
- using this as a passport to meet the demand in UK, Europe or other parts of the world.
UCITs-compliant funds embrace a robust risk framework while remaining flexible. It is a globally accepted standard and serves as a passport to distribute Malaysian-managed funds to Europe and around the world. It helps to solve the challenges of educating and creating global awareness on the benefits of investing in the Islamic asset management space. The ability to exhibit the performance track records within an acceptable global risk framework of Islamic Funds will grant credibility to the structure and qualify it for international distribution.
The CEO of IFIA, Mr. Gary Palmer announced that the Securities Commission of Malaysia signed a Memorandum of Understanding (MoU) with the Central Bank of Ireland on 4 November 2011. This MOU will sustainably facilitate the flow of information between the two jurisdictions. It also recognises Malaysia as a jurisdiction, which will enable Malaysian asset managers to utilise the Irish-regulated fund platform. As a result, Malaysian asset managers can now register their funds under the UCITS-compliant or any approved framework in Dublin.
By registering on a global fund platform, Malaysian asset managers can entice international investors, retail or institutional, to enter the Malaysian investment space. UCITS-compliant funds can serve as tools for Malaysia to bring in global assets under management (AUM) from international investors. In the long term, this potentially huge AUM will enhance Malaysia as an international hub for Islamic wealth management, in tandem with its aspiration to be an international hub for Islamic finance.
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