First cross-border transaction using Bursa Malaysias Bursa Suq Al-Sila commodity trading platform

15th September 2009

Gatehouse Bank plc, the latest Islamic bank in the UK to be granted an FSA licence, has announced that it has completed the first trade outside Malaysia encompassing movements across Bursa Malaysia's Bursa Suq Al-Sila' platform which is an end-to-end Shari'ah-compliant commodity trading platform that facilitates commodity-based Islamic financing under Shari'ah principles.

The US $ Islamic money-market Murabahah transaction with CIMB Islamic, the world's largest arranger of sukuks and a member of South East Asia's 5th largest lender - CIMB, is the first international trade using the Bursa Malaysia platform. It follows an initiative established by UKTI July 2009 to encourage such multinational and cross-border trade. In a move to promote the development of global Islamic finance, the deal additionally shows progressive efforts to real political desire to foster business relations between the Eastern Islamic financial markets in Malaysia and those of the West via the City of London.

Bursa Malaysia, a Malaysian exchange holding company, operates a fully-integrated exchange and is today is one of the largest bourses in Asia for local and global investors. Its Shari'ah compliant trading platform, initially intended for domestic use for the commodities trade and concurrent with Malaysian law, has now been expanded for international use.

Gatehouse Bank and CIMB Islamic utilised the standard Interbank Murabahah and Master Agency Agreements produced by the Association of Islamic Banking Institutions Malaysia (ABIM) to document the transaction. This is the first time that the AIBIM documents have been used to document a cross border money market transaction between Malaysia and the UK. A number of amendments were made to the standard documents to facilitate the transaction, including the documentation being governed by English law as opposed to Malaysian law. The changes were documented by way of an amendment letter, which was also executed by Gatehouse and CIMB. The standard documentation together with the agreed form of amendment letter will now allow transactions to be executed in a faster, more efficient manner and, more significantly, beyond those between Gatehouse Bank and CIMB Islamic to all institutions who wish to do so.

The trade was successfully executed at Gatehouse Bank's London office at 10.15 am on 15 September and was overseen by the Gatehouse Bank team under Richard Thomas, Raja Teh Maimunah, Global Head Islamic Markets of Bursa Malaysia and Badlisyah Abdul Ghani, CEO of CIMB Islamic.

Malaysia is the world's largest market for Islamic finance, encompassing a large number of Islamic banks and institutions. The transaction and revised platform signals the opening of a new product line for Gatehouse Bank, not previously targeted by Islamic institutions, offering the innovative and unique features in a package that can be used by other Islamic financial services companies around the world.

On the completion of the trade Gatehouse Bank CEO, Richard Thomas, commented:

"It is an honour to be one of the parties in the first international trade over Bursa Malaysia's platform. With CIMB Islamic, not only have we made the first cross-border Islamic finance transaction with Bursa Malaysia, but we have also set a precedent for a process whereby transactions can be enacted far more quickly and more efficiently than ever before. We hope and expect that many other Shari'ah compliant banks will follow suit and we intend to do everything we can to help them do so.

"The innovative and unique features of this process will speed up the time that deals can be made for all banks and institutions using this platform, paving the way forward for the future growth of Islamic finance right across the globe. Gatehouse Bank was established to lead the way in Shari'ah compliant transactions from the Western market; this trade demonstrates that we are making real progress towards our goal of market leadership."

Dato' Yusli Mohamed Yusoff, CEO, Bursa Malaysia, added:

"Malaysia is already benchmarked worldwide as a centre of Islamic Finance excellence and innovation, and all efforts by regulators and players have been geared towards making Shari'ah compliant financing facilitative and easier the world over. This first international trade on Bursa Suq Al-Sila' affirms the viability of Bursa Malaysia's end-to-end Shari'ah commodity platform in facilitating cross-border financing. This also means opening up of our Islamic Markets as multi-currency trades are now accessible via this platform. In addition, this deal signifies the strengthening of ties between East and West. To that end, Gatehouse Bank and CIMB Islamic have shown real innovation and forward thinking for the world of Islamic finance. By speeding up the process by which these transactions can take place, international trade between these two countries will undoubtedly be encouraged and promoted to a higher level."

Badlisyah Abdul Ghani, CEO CIMB Islamic, added:

As a world leading provider of Islamic finance services, our entire business model is focused on the innovation and development of pioneering new products and services for our clients. CIMB Islamic are greatly encouraged that this Islamic money market transaction Gatehouse will pave the way for further cross border transactions and further displaying Islamic finance as a progressive, dynamic and global approach to banking."

For all media enquiries, please contact:

Angelena Lee
Gatehouse Bank plc
Email : info@gatehousebank.com