IFSB Consults on Guidance Note for Shariah-Compliant LOLR Facilities
IFSB issued the exposure draft of Guidance Note-7 (ED GN-7) on Sharī`ah-compliant lender-of-last-resort (SLOLR) facilities. This exposure draft complements the existing IFSB guidance on SLOLR and offers international benchmark guidelines to regulatory and supervisory authorities for developing and offering SLOLR facilities as part of the financial safety net arrangement for institutions offering Islamic financial services (IIFS) in their jurisdictions. Comments are requested by July 05, 2019.
ED GN-7 is primarily intended to serve as a benchmark for central banks in establishing and operationalizing an SLOLR framework that applies to full-fledged Islamic commercial banks and Islamic commercial banks that are subsidiaries of conventional banks. The exposure draft covers several essential features of an SLOLR arrangement, including the following:
- Preconditions for developing and implementing an SLOLR mechanism
- Eligibility criteria to access SLOLR
- Non-exhaustive selection of Sharī`ah-compliant structures and mechanisms that central banks could utilize for SLOLR purposes
- Applicability of penalty rates to these mechanisms
- Sharī`ah-compliant eligible collateral
- Relevant disclosures to be made by central banks to IIFS in their jurisdictions
Central banks are expected to start implementation of this guidance note from January 01, 2021, taking into account the time needed to prepare the necessary market infrastructure; to run appropriate assessments on eligible collateral, haircuts, and Sharī`ah-compliant structures; and to make the necessary disclosures to IIFS in their jurisdictions.
Related Links
Comment Due Date: July 05, 2019
Effective Date: January 01, 2021
Keywords: International, Banking, SLOLR, IIFS, Guidance Note, Lender of Last Resort, Islamic Banking, IFSB
Previous Article
PRA Consults on the Insurance XBRL Taxonomy Version 1.1.0Related Articles
OSFI Consults on Revisions to BCAR and Leverage Requirements Returns
OSFI proposed revisions to the Basel Capital Adequacy Reporting (BCAR) and leverage requirements returns for the 2023 reporting, with the comment period ending on July 09, 2021.
EBA Seeks Views on Revisions to Nonperforming Loan Data Templates
EBA published a discussion paper on review of the standardized nonperforming loans (NPL) transaction data templates, along with the proposed revised NPL data templates.
Bundesbank Updates Requirements Documentation for AnaCredit Reporting
Bundesbank updated AnaCredit reporting requirements for banks, with reference to the Notice 8001/2020.
CBUAE Issues Regulation for Low-Risk Specialized Banks
CBUAE has issued a regulation that introduces the licensing and supervision framework for low-risk, specialized banks.
APRA Proposes Guidance to Support Prudential Standard on Remuneration
APRA is consulting on CPG 511—the draft Prudential Practice Guide on remuneration for banks, insurers, and superannuation licensees—with the comment period ending on July 23, 2021.
MAS Announces Grant Scheme to Spur Adoption of Regtech Solutions
MAS announced a new RegTech grant scheme and an enhancement of the Digital Acceleration Grant (DAG) scheme to accelerate technology adoption in the financial sector.
PRA Review Finds Most Banks Compliant with Regulatory Reporting Rules
PRA published a letter that sets out findings from the 2020 Internal Audit Review of the Collections function of a sample of non-systemic banks and building societies.
EIOPA Launches Consultation on Interbank Offered Rate Transitions
EIOPA launched a consultation on the Interbank Offered Rate (IBOR) transitions, in context of the EU Benchmarks Regulation.
IFRS Issues Proposals Related to New Sustainability Standards Board
The Trustees of the IFRS Foundation proposed amendments to the Constitution of the IFRS Foundation to accommodate the potential formation of the new International Sustainability Standards Board within the governance structure of the organization.
BCB Amends Rules on Open Banking and Proposes ESG Disclosure Rules
BCB amended the resolution that establishes technical requirements and operational procedures for the implementation of open banking in Brazil, with the amended resolution entering into force on its publication date.
