Bahrain-based International Islamic Financial Market (IIFM) and the International Capital Market Association (Icma) are working to raise awareness of IIFM’s recently launched Master Collateralized Murabahah Agreement (MCM Agreement).

The MCM Agreement can be used between financial institutions to facilitate liquidity management through shariah compliant transactions. The agreement allows Islamic Financial Institutions (IFIs) as well as corporates and other institutions to be able to better utilise their sukuk portfolios and other approved Islamic instruments such as equities.

“This standard documentation is culmination of efforts by a number of stakeholders to develop a unified template which, at the moment, is the best possible Islamic alternative to repo,” said Ijlal Ahmed Alvi, CEO of IIFM.

“Icma has a long history of successfully introducing standardisation into repo markets, notably through the Global Master Repurchase Agreement (GMRA), and promoting a wider understanding of repo and collateral; in line with this we commend IIFM on their production of this new master agreement,” Icma's deputy head of market practice and regulatory policy.