SESRIC


2nd Meeting of the OIC Member States' Stock Exchanges Forum
 
Date : 18-19 October 2008 Venue : Istanbul Turkey

The Second Meeting of the OIC Stock Exchanges Forum was organised by the Istanbul Stock Exchange of the Republic of Turkey and convened in Istanbul on 18-19 October 2008 with the participation of representatives of 17 stock exchanges in 15 OIC Member States, Central Depositories, Clearing and Registry Institutions of 7 OIC Member States, OIC General Secretariat, Statistical, Economic and Training centre for Islamic Countries (SESRIC), Islamic Centre for Development of Trade (ICDT), Islamic development bank (IDB) and COMCEC Coordination Office. Representatives of Capital Markets Board and Privatisation Administration of Turkey, Islamic Financial Services Board (IFSB), Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), Citibank EMEA and Dow Jones Indexes have also attended the Meeting.

The Meeting was opened by Mr. Hŭseyin ERKAN, Chairman and CEO of the Istanbul Stock Exchange. Welcoming all the delegates to Istanbul, Mr. Erkan reminded the participants that the OIC Stock Exchange Forum was initiated and established within the framework of the COMCEC in 2005 with a view to enhancing cooperation among the stock exchanges of the OIC member countries.

Recalling that the Forum started in 2005 with the participation of 11 OIC stock exchanges and 7 other related institutions, Mr. Erkan said that today the participation of 17 stock exchanges in 15 OIC Member States and the increasing number of OIC and other related regional institutions is a clear indicator on the enthusiasm of the member countries to continue this initiative.

Noting the high potential of the stock exchanges in the OIC member countries, with a total market capitalisation of $2.1 trillion and 4,100 listed companies, Mr. Erkan strongly emphasised the importance of enhancing cooperation among the stock exchanges of the member countries, particularly at this time where the global credit crisis has tremendously affected the financial markets.

During the working sessions of the Meeting, the participants discussed and deliberated on various technical cooperation issues of concern to the stock exchanges of the member countries as well as on other administrative issues with a view to enhance and strengthen the future work and activities of the Forum. In addition to the discussions and comments made by the representatives of the stock exchanges of the member countries, a number of presentations on specific issues have been also made by the participants of various related institutions.

Mr. Emin Ozer, a member of the Capital Markets Board of Turkey, made a presentation on the recent progress in the Turkish capital markets and the role of the Capital Markets Board of Turkey. In the face of the global financial crisis, Mr. Ozer highlighted the fact that it is indeed very important for OIC member countries to deal with this financial challenge as a good opportunity to increase the potential of and interest in Islamic financial and investment instruments in the regional and international markets. This issue has been also emphasised by Mr. Rushdi Siddiqui, Global Director of Dow Jones Islamic Market Index Group, who argued in his presentation that the financial crisis has provided a unique, one-time opportunity to explain Islamic finance to the world at large, from a holistic rather than from religious point of view.

In the same context, Mr. Mohamad Nedal Alchaar, Secretary General of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) gave an overview and evaluation of the benefits of the AAOIFI standards, particularly the Islamic Securitisation/Sukuk Market. This presentation was followed by the presentation of Mr. Abdullah Haron, Assistant Secretary General of the Islamic Financial Services Board (IFSB), in which he made a general introduction on the concepts, structures and statistics of the Islamic capital market at global level and touched upon the challenges in globalising the Islamic capital market instruments.

On the other hand, in his presentation, Mr. Andrew Mulley, Issuer Services EMEA Business Head of Citibank, referred to the different phases of the global financial crisis pointing out that an enormous amount of liquidity has already drained from the market and this lack of liquidity leaves room for new opportunities for market players. In this context, he presented general information on the role and activities of issuer services in global banks, with a special reference to the Islamic debt markets, emphasising the benefits of a depositary receipt programme for Sukuks. In his presentation, Dr. Emin Çatana, President and CEO of the Istanbul Stock Exchange Settlement and Custody Bank (Takasbank), made a brief evaluation of the global financial turmoil based on a brief layout of the global trends in the financial markets. He also described the characteristics of an ideal securities settlement system in such circumstances and emphasised the importance of cooperation among post-trade institutions.

A set of proposals, recommendations and decisions have been made at the end of the Meeting, where the Forum, among other things, emphasised the importance of standardisation for Islamic capital markets and called upon the regulatory authorities to encourage the recognition of the standards issued by relevant institutions such as AAOIFI, IFSB and IIFM. The Forum decided that these institutions be members and advisors of the Forum. The Forum also decided that Istanbul Stock Exchange to continue acting as the secretariat and coordinator of the Forum and recommended that a similar forum among the capital markets’ regulatory authorities should be established.

The Forum also decided to merge the two previous committees of the Forum into one committee called “Working Committee”, which shall assume the task of studying and proposing the areas of cooperation to the Forum. Within the scope of the Working Committee, four task forces have been established, namely task force for customised indices, task force for post-trade services, task force for the promotion of Islamic capital markets, and task force for studying the feasibility of an Islamic Securities Exchange.