The standardisation of Islamic finance and the future of the industry were discussed at a key conference in Bahrain yesterday (November 17).

Representatives of the Islamic banking sectors from more than 35 countries converged on the Diplomat Radisson Blu Hotel, Residence and Spa to study key issues of Islamic finance, said a report in the Gulf Daily News (GDN), our sister publication.

The Central Bank of Bahrain hosted the conference in co-ordination with the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).

The annual conference allows people within the sector to discuss the standards as well as submit proposals for change.

"AAOIFI will collect ideas and feedback and we take all of those in mind when we review our standards," said AAOIFI corporate document manager Mohammad Bakir.

"We discus the ideas internally with our board and once we have any proposal for change we can hold a Sharia board meeting.

"Then if it is discussed and agreed on it will go for a public hearing which is usually held with industry stakeholders.

"The last one was held last month in October.

"So when we receive good suggestions we can then take it to the board to be reviewed until it reaches the highest level where a standard can be amended or changed or added at a public hearing," he added.

He said that the conference was one of the "most important one in the whole Islamic and financing industry which could influence Islamic banking globally."

"Usually the conference is attended by those people working for the industry, practitioners, experts, technical people such as lawyers, financers, Sharia scholars, those in or working on Sharia boards and supervisory boards.

"Everyone in the industry is here," he added.

"We have people from Asia, Indonesia, Kazakhstan, Brunei and central Asia - you see all those countries have Islamic banking and it is gaining momentum in Asia.

"They are all here to know where the industry is heading and we are proud to say that we have an attendance that represents more than 35 countries."

Legal documenting standardisation, international co-operation and sukuk banking were the main topics of discussion at the conference.

AAOIFI secretary general Dr Hamad Merah said that as Islamic banking gains momentum across the globe there is a further need for more international harmonisation.

"Some countries, including non-Muslim countries are issuing sukuk, like the UK but also in the east and the west - they are all issuing sukuk," he said.

"So now we are discussing important issues in sukuk, especially how we can use it and Islamic capital markets for long term financing.

"One of the most important things in this sector is to create cross-border harmonisation.

"In this regard we issue the Sharia standard - now the Sharia standard is representing the technical side of the Islamic financial intuitions' products.

"There are a lot of ideas and views that are had by the Sharia scholars but through AAOIFI we have standardised it so that the process doesn't change or differ no matter which country."

Dr Merah said that during the conference potential collaboration with other banking and financing standardisation organisations would be discussed.

"The potential co-operation with International Financial Reporting Standards (IFRS) to gain a higher level of harmonisation all around the world, especially on the accounting side is being discussed," he said.

"Another major topic is how we can incorporate AAOIFI and Sharia banking into legal documentation?

"Islamic finance is all around the world so to have one step of process would benefit the legal branch of AAOIFI banking.

"Maybe we will have an initiative in this regard after the conference," he added.

The conference continues, starting at 9.30am and running until 4pm.

Presentation will be given on Implication of Basel III on Islamic financing, sukuk and Islamic Capital markets as avenues for long-term financing as well as updates on the AAOIFI accounting standards. - TradeArabia News Service