IIFM Publishes White Paper on IBOR Transition for Industry Awareness & Development

Islamic finance standard-setting body, the International Islamic Financial Market (IIFM) today released a White Paper on ‘Global Benchmark Rate Reforms and Implications of IBOR Transition for Islamic Finance’. Benchmark rate reform is a significant regulatory driven development in the international markets which will also have consequences for different segments of Islamic finance.

Globally, work on phasing out Inter-Bank Offered Rates (IBOR’s) and transition to Risk Free Rates (RFR’s) is now nearing completion by the various working groups in Europe, North America, Switzerland and Japan for currencies such as USD, EUR, GBP, CHF and JPY. The regulators in these jurisdictions are pushing the conventional financial services industry to start implementing RFR’s as the benchmark rate instead of IBOR’s and most of the IBOR’s fixing will cease to exist after 31st December 2021 while in few cases the final deadline will be June 2023.

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