5th Meeting of the OIC Member States' Stock Exchanges Forum was held on 17-18 September 2011 in Istanbul, Turkey. The meeting was hosted by the Istanbul Stock Exchange. Representatives from 23 stock exchanges and 6 central depositories, registry and clearing institutions of the OIC member states, and 14 related organizations, including SESRIC and IDB, attended the meeting. The Centre was represented at the Forum by Mr. Nadi Serhan Aydın, Researcher at the Centre.

In his welcoming speech, Mr. Hüseyin Erkan, Chairman of the Forum and Chairman and CEO of the Istanbul Stock Exchange (ISE) stated that OIC member countries have necessary ingredients for increasing trade across their stock exchanges. He pointed to the growing interest in Islamic financial markets and highlighted the fact that there are hundreds of sharia compliant indices comprising mainly of companies from developed countries, not of those from OIC member countries. Mr. Erkan argued that the Islamic finance funds are huge whereas the available Islamic financial instruments are not diverse enough to bring the needed liquidity to the market.

Mr. Mehmet Metin Eker, General Director of the COMCEC Coordination Office, underlined the necessity of increasing cooperation among stock exchanges to better be prepared to the global shocks as the inter-dependencies have become ever stronger today.

At the beginning of the Working Committee Meeting of the Forum, Mr. Erkan briefed the Committee on the background of the Forum activities and progress made in various areas. During his presentation, Mr. Erkan informed the participants about the training course to be organized by SESRIC between ISE and Islamabad Stock Exchange, and further added that the date of the course would be announced soon.

The Working Committee Meeting continued with presentations by task forces. Two officials from Standard&Poor’s (S&P), the benchmark and tradable index provider for the OIC Stock Exchanges, were also present at the meeting to brief the Working Committee on the preparations for the launch of OIC shariah indices and to address the issues raised by the Working Committee members. The representative of the Amman Stock Exchange argued that the country weights should be readjusted to capture more member countries and to yield a broader representation of the member countries. S&P will undertake another revision on the index calculation methodology and update the Forum Secretariat. Noting that only 8 member countries expressed their clear intention to participate in the tradable index and other 8 have shown interest in participating, Mr. Erkan requested that the OIC index be launched in 2012 with the countries available by the end of 2011.

Representatives from Tehran Stock Exchange, the leader of Task Force for Capital Market Linkages, made a detailed presentation on SAMIP (Settlement-Aware Markets Interlinking Protocol), the capital market linkage structure proposed for linking the OIC member countries’ stock exchanges. Mr. Erkan stated that establishing a well-functioning capital market linkage platform and international CSD (Central Securities Depository) among the member countries is the Forum’s ultimate goal, however, that the Forum should look for the simplest ways and means of increasing the volume of securities trade among the member countries’ stock exchanges.

In line with the decision taken at the 4th Meeting of the Forum, a seminar on capital market linkages and technology was also organized on the sidelines of the 5th Meeting of the Forum, with the participation of representatives from Chicago Mercantile Exchange, Euroclear, NASDAQ OMX Helsinki, NYSE Euronext and SunGard. The seminar participants shared their views and experiences on various practical aspects of building capital market linkages and the role of technology in achieving the results. The Meeting also featured a presentation on Islamic finance by Thomson Reuters.

The Final Report of the Forum, including the adopted recommendations and decisions, will be submitted to the 27th Session of the COMCEC, which will be held on 17-20 October 2011 in Istanbul. The 6th Meeting of the Forum will be held in September 2012 in Istanbul, prior to the 28th Session of the COMCEC.

For more information, please visit the website of the Forum at http://www.oicexchanges.org

Documents

• Draft Report (English) (French) (Arabic)