The International Islamic Liquidity Management Corp (IILM), which plans to issue its maiden sukuk by June, is facing its final hurdle as it aims to secure a network of distributors.

The IILM, which was formed to address the shortage of financial instruments for Sharia-compliant banks to manage their short-term funding needs, is courting banks in various countries to be 'primary dealers' or distributors to ensure a secondary market for the sukuk.

"At the IILM, we have our own sharia board. They approve our product, but because we are distributing through primary dealers we still have to get the approval of every primary dealer's Sharia committee," chief executive Professor Rifaat Ahmed Abdel Karim said at a conference in Kuala Lumpur yesterday.

"They may not accept it, we don't have common guidelines implemented and accepted by the market to facilitate this process," said Karim.

The IILM has signed on eight banks as primary dealers and is said to be considering others, including Standard Chartered and Malaysia's Bank Islam.

Karim called for the establishment of an institution to resolve disputes involved in the development of products for the industry.

The IILM, comprising nine central banks and monetary agencies as well as the Jeddah-based Islamic Development Bank , aims to issue up to $500 million of dollar-denominated sukuk and eventually expand the programme up to $3 billion.-Reuters