Treasury products offer end users a range of opportunities to hedge, speculate or manage risk exposure, and Shariah compliant equivalents of conventional products are no different. The structure, use and application of Islamic treasury products are, however, governed by very important rules and conventions. With Shariah compliant treasury and hedging products becoming more widespread by financial institutions for both risk hedging and for structuring client investment solutions, these rules and conventions are crucial to the development of these products.
This one day, multi-speaker event will analyse and discuss what can and cannot be done, what clients are demanding, what opportunities are available and what solutions can be offered. We shall analyse these issues from the view of product structuring, as well as examining key Shariah, risk management, legal and documentary considerations.
Key Outcomes
To understand the growth and potential of Islamic money markets, foreign exchange and profit rate swap instruments
To understand Shariah and legal principles governing Islamic treasury operations and principles in structuring and using Islamic treasury instruments
To assess, identify and manage risk in Islamic treasury products and techniques
To assess key considerations of Shariah audit and review for Islamic treasury products
To understand key legal and documentation Issues, including the application of the key international and local master agreements
Who Will Benefit
The seminar will be beneficial to anyone from treasury and money market departments of an Islamic financial institution, as well those in conventional treasury departments looking to incorporate Islamic products. It will also be highly beneficial to professionals from the following departments: legal and compliance, Shariah, finance, risk management, audit/assurance.
Agenda
09:00 - 09:15
Introduction & welcome
09:15 - 10:00
Setting the Scene: Overview of Islamic Treasury and Risk Management Products and Markets in Malaysia
What products are currently available, what are they used for and by whom?
The regulatory environment: Key regulations, and what can and cannot be done
Issues and challenges: Shariah concerns, usage of treasury products
Lessons from the conventional market: what has worked and what hasn’t, and how far should product replication be taken?
Panelist:
Tuan Syed Alwi Mohd Sultan — Executive Vice President, Corporate Services, Bank Muamalat Malaysia
10:00 - 11:00
Key Structuring and Developmental Issues for Islamic Foreign Exchange (Forex) Products
Reminder on conventional Forex swaps & forwards structures
Structuring issues for Islamic Forex forwards
Structuring issues for Islamic Forex swaps and crosscurrency swaps
Pricing and valuation issues for Islamic Forex products
Identifying real-life challenges
Overview of key Shariah and risk management issues
Panelist:
Tuan Syed Alwi Mohd Sultan — Executive Vice President, Corporate Services, Bank Muamalat Malaysia
11:00 - 11:30
Coffee & Networking
11:30 - 12:30
Examining Important Shariah Principles and Issues for the Development of Islamic Treasury and Risk Management Products
Key Fiqh issues in the development of Islamic treasury products, and Shariah principles governing risk management and foreign exchange
Hedging (Tahawwut) versus speculating (Talaaub)
Key concepts of Waad (promise) and Tawarruq (Commodity Murabahah)
Shariah audit and control considerations for Islamic treasury
Panelist:
Suzaizi Mohd Morshid — Head of Treasury, RHB Islamic Bank, Malaysia
12:30 - 14:00
Luncheon
14:00 - 15:00
Key Structuring and Developmental Issues for Islamic Profit Rate Swaps (IPRS)
Reminder on conventional interest rate swap structures
Examining important contracts for the development of IPRS – Waad and Murabahah
Pricing and valuation issues for Islamic IPRS
Identifying real-life challenges
Overview of key Shariah and risk management issues
Panelist:
Pavanjit Kaur — Head of Treasury Solutions, Global Markets, Hong Leong Islamic Bank
15:00 - 16:15
Key Legal and Documentation Issues for Islamic Treasury Products in Malaysia
Reminder on the legal and regulatory requirements that need to be considered when developing legal documents for Islamic Treasury products
Practical issues and solutions in developing adequate legal documents for Islamic treasury products
Marketing restrictions including on reverse inquiry; temporary licensing; marketing support and marketing materials
Checks on customer’s capacity and capability; close-out and insolvency issues including ranking
Hedging vs gambling and the position under Malaysian law
Tax on documents
Application of the key international and local master agreements
Panelist:
Madzlan Hussain — Partner and Head, Islamic Financial Services Practice, Zaid Ibrahim & Co., Malaysia
