Featured Product

    IFSB Consults on Sharīʻah Governance Framework

    March 31, 2022

    The Islamic Financial Services Board (IFSB) is consulting, until June 23, 2022, on an exposure draft of the revised Sharīʻah governance framework for institutions offering Islamic financial services.

    The draft standard sets out the following revised set of guiding principles on the key components of a sound and effective Sharīʻah governance framework for institutions offering Islamic financial services:

    • An institution must have in place a comprehensive Sharī`ah Governance Framework that encompasses a set of institutional and/or system-wide arrangements for the effective and independent oversight of Sharī`ah compliance of its products and services, processes, and business operations.
    • The Regulatory and supervisory authorities shall have adequate understanding of Sharīʻah noncompliance risks and accordingly ensure that the institutions have in place an adequate and effective Sharīʻah Governance Framework and reporting mechanism.
    • Regulatory and supervisory authorities and/or governments are strongly recommended to establish and appropriately empower Central Sharīʻah Boards to harmonize Islamic banking and finance practices in the jurisdiction, in line with Sharīʻah principles and rules.
    • An institution must ensure that its Sharīʻah governance framework includes, at a minimum, Sharīʻah Supervisory Board, Sharīʻah Compliance Function, Internal Sharīʻah Audit Function, and Independent External Sharīʻah Audit.
    • An institution must clearly define the roles and responsibilities of its Board of Directors, Senior Management, and others toward upholding the Sharīʻah compliance of its activities and operations.
    • An Islamic Window of a Conventional Financial Institution must have a suitable Sharīʻah governance framework in place to ensure effective Sharīʻah compliance of its operations.
    • An Islamic subsidiary/affiliate of a Conventional Financial Institution must have a suitable Sharīʻah governance framework in place to ensure effective Sharīʻah compliance of its operations.
    • An institution is responsible to ensure that it prudently recognizes any additional considerations or exceptional circumstances that may require it to apply proportionality and/or other considerations toward implementation of the principles of this standard.
    • An institution shall be transparent in its Sharīʻah governance to its shareholders, customers, other relevant stakeholders, and market participants.

    This draft standard applies to institutions offering Islamic financial services in the Islamic banking, Islamic insurance, and Islamic capital market sectors. Regulatory and supervisory authorities may choose to apply this standard to other institutions offering Islamic financial services in their jurisdictions. The standard adopts a principle-plus-rule approach that provides a comprehensive set of Sharīʻah governance practices for implementing each principle. 

     

    Related Links

     

    Keywords: International, Banking, Securities, ESG, Governance, Islamic Finance, IFSB, Insurance, Islamic Banking

    Related Articles
    News

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News
    News

    EP Reaches Agreement on Corporate Sustainability Reporting Directive

    The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).

    June 21, 2022 WebPage Regulatory News
    News

    PRA Consults on Model Risk Management Principles for Banks

    The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.

    June 21, 2022 WebPage Regulatory News
    News

    EC Regulation Amends Standards for Calculating Credit Risk Adjustments

    The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.

    June 21, 2022 WebPage Regulatory News
    News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News
    News

    EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance

    The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.

    June 17, 2022 WebPage Regulatory News
    News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News
    News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News
    News

    BIS Bulletins Discuss DeFi Lending and Aspects of Crypto-Assets

    The Bank for International Settlements (BIS) published bulletins on lending in decentralized finance (DeFi) system, on blockchain scalability and fragmentation of crypto, and on extractable value and market manipulation in crypto and decentralized finance.

    June 16, 2022 WebPage Regulatory News
    News

    UK Authorities Issue Regulatory and Reporting Updates for Banks

    The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.

    June 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8292