Brazil Toys with Idea of Islamic Stock Market and Banking System

Brazilian Bovespa This Monday, December 8, Brazil's Securities and Exchange Commission (SEC) and the Securities, Commodities and Futures Exchange (BM&FBovespa) promote, in São Paulo, the seminar "financial and capital markets in the Islamic world: opportunities and challenges".

According to the event organizer, José Alexandre Vasco, Investor Protection and Guidance supervisor at the SEC, the objectives are to inform the Brazilian market of the characteristics of the Islamic financial system and debate the possibilities of adopting operations of this nature in Brazil.

"We started preparing this seminar early this year, when the current crisis was not yet at its strongest. The moment now is appropriate, as the system may signal a market alternative for attraction of foreign investment," said Vasco.

Ever since the worsening of the crisis in August, Brazilian capital markets have been suffering with the outflow of traditional foreign capital.

Among the speakers is Angela Martins, a specialist in the matter and director at ABC Brazil Bank, the Brazilian subsidiary of the Arab Banking Corporation (ABC), headquartered in Bahrain. Angela wrote a book on the matter and has already worked on structuring Sharia operations, following the rules and customs that follow Muslim precepts.

The seminar should also include representatives of institutions that operate in this market, like HSBC – a bank with great presence in the Middle East, the region to be the object of analysis -; the market regulator in Malaysia, where the sector is being promoted; organizations in the United Kingdom, a western nation that is the pioneer in adoption of the Islamic system; and public and private organizations from Brazil, among others.

According to Vasco, the SEC has been promoting seminars of interest to the market since 2006, when the Center for Studies of Capital Markets was established within the organization. The event on Monday should be the fifth in the series and the theme was chosen by the professionals and sector institutions themselves.

Among the questions to be debated are the possible changes necessary in the Brazilian legislation for Islamic products to be released in the country. That is where the importance of learning about the experience of the United Kingdom lies, as it may be adopted in Brazil.

"One of the possible results of the seminar is the decision of studying the matter further, with changes in the legal order to simplify greater development of this kind of operation," said Vasco.

The presence of representatives of different sectors connected to the market, like regulators, stock markets, banks and consultancy companies, according to him, should guarantee that the discussion will not be too focused.

To the superintendent, however, the lack of Islamic banking products in Brazil is more due to lack of concrete information than due to regulatory bars. This is a deficiency that the seminar hopes to overcome.

Anba

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