Brunei Promising As Regional Islamic Fund Management Centre
By James Kon

Bandar Seri Begawan - In ASIA, Brunei Darussalam stands out as one of the few nations that have the essential ingredients for the success of a regional Islamic Fund Management Centre.

The Sultanate's impeccable Islamic credentials, political and economic stability as well as strategic geographical location are just some of the key attributes that have made it ideal as the place to pursue such an ambition.

This was stated by Pehin Dato Seri Setia Hj Abd Rahman Hj Ibrahim, the Minister of Finance II, in his keynote address as the guest of honour at the opening ceremony of Brunei Islamic Financial Services Forum.

The event, which carries the theme of "Developing a Regional Islamic Fund Management Centre", was held yesterday morning at JPCC's Royal Berkshire Hall. Outlining the country's positive legal structures, he cited that "Brunei Darussalam also offers excellent physical and administrative infrastructures combined with the requisite comprehensive legal and regulatory frameworks conducive to business while protecting the rights and interest of all stakeholders."

"Legislations which have been enacted to facilitate and promote fund management activities include the International Banking Order 2000 and Mutual Funds Order 2001. Provisions have also been made for specifically defined Islamic funds that do not go against the religion."

The dynamic domestic banking and financial sector in Brunei, where Islamic and conventional finance live a harmonious and mutually beneficial co-existence, also bodes well for its development as an Islamic Fund Management Centre, he added. The Minister of Finance II then pointed out that "Brunei Darussalam took a bold first step in establishing its Islamic capital market with the launch of its first ever-Islamic bond early this year.

The first short term Sukuk Al-Ijarah was issued in March this year and three issuances totalling $450 million in value have been successfully completed ever since.

"While more recently, Ministry of Finance has approved

the issuance by BLNG of a l0-year Sukuk Al-Ijarah, which was jointly arranged by the local Islamic bank and an experienced international partner." Another sign that Islamic banking is blooming in Brunei is the merging of the two Islamic banks, IDBB and IBB, as announced by His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam in a Titah last year.

Pehin Dato Seri Setia Hj Abd Rahman Hj Ibrahim stated that the newly merged bank, now known as Bank Islam Brunei Darussalam Berhad (BIBD), would be the biggest financial institution in the country, based on its total accumulated assets and deposit.

Post-merger BIBD therefore will be better positioned to play its part to contribute towards Brunei's development as a serious player in the field of Islamic finance.

Highlighting the importance of Islamic Financial Services Board or IFSB (of which body the Ministry of Finance, Brunei Darussalam has been a member since 2003), he said that it serves a significant role in setting up international standards for regulatory and supervisory agencies.

This is to ensure the soundness and stability of the Islamic financial services industry. And in recent achievement, IFSB was responsible for the issuance of its first two standards on capital adequacy and risk management for institutions that offer Islamic financial services.

The standards have been recommended for implementations among IFSB members by year 2007. Finally, the guest of honour hoped that participants would take advantage of the forum to enhance knowledge and build their networks. Organised by IFSB, some 70 representatives from financial institutions locally and overseas are attending the forum, which is going to conclude today.

Among the topics being discussed are Islamic Fund Management Versus Conventional 'fund Management, Hedge Funds Alternative Assets, Classes for Islamic Fund Management, Risk Management and Diversification for Islamic Fund Management, among others. Also present at the opening ceremony were Dato Paduka Hj Ali Apong, Permanent Secretary at the Ministry of Finance, Professor Rifaat Ahmed Abdel Karim, the Secretary General of IFSB, as well as officials from various financials institutions.  -- Courtesy of Borneo Bulletin

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