Exchange groups Bursa Malaysia and the Bahrain Financial Exchange (BFX) have signed a memorandum of understanding to develop a commercial agreement for the provision of financial products to Islamic market participants and strengthen bilateral ties.
The MoU will include a feasibility study to identify products and market channels based on an already-completed needs assessment for the Islamic market.
The memorandum also lays the foundation for the two exchanges to work together on increasing awareness of the investment opportunities in their respective Islamic markets and assist each other in developing the Islamic investment framework across multiple geographies.
“The collaboration with BFX is aimed at facilitating cross-border development in the Islamic financial markets, widening market reach, exchanging technological expertise and building a sustainable business model for both exchanges,” said Dato’ Yusli Mohamed Yusoff, CEO of Bursa Malaysia, in a statement. “This is a major step towards consolidation in the Islamic finance world. As Malaysia and the Middle East are the leading centers of Islamic finance, and as both exchanges come together on a single platform, this will add to the strength of this industry. This initiative will go a long way in addressing the issues of standardisation, innovation and transparency, thus providing a new dimension to the Islamic finance market.”
BFX board director Arshad Khan added, “This initiative is a major development for the Islamic finance market where the collaboration will seek to offer a wider risk management portfolio to global Islamic practitioners. By partnering with Bursa Malaysia we can ensure that the products offered are well defined, robust and fully Shariah compliant and I am honoured that we have been able to work with such a well respected global business.”