The Islamic Financial Services Board (IFSB) has published a second set of frequently-asked questions (FAQs) on four of its standards.
The new FAQs aim to promote implementation of IFSB standards globally through presenting clarifications and explanations on the issued standards. The four IFSB standards, are:
- Guiding Principles on Disclosure Requirements for Islamic Capital Market Products (Sukûk and Islamic Collective Investment Schemes) (IFSB-19);
- Key Elements in the Supervisory Review Process of Takâful/Retakâful Undertakings (IFSB-20);
- Core Principles for Islamic Finance Regulation [Islamic Capital Market Segment] (IFSB-21); and
- Revised Standard on Disclosures to Promote Transparency and Market Discipline for Institutions Offering Islamic Financial Services [Banking Segment] (IFSB-22).
The Secretary-General of the IFSB, Dr Bello Lawal Danbatta, commented on the importance of providing consistent technical support by FAQs publications: “We have received positive feedback from our members on the first FAQs publications, which shows the need of addressing the concerns related to certain topics. Our continuous work in this direction, without a doubt, is a significant input in building a proper understanding of issued IFSB standards, guidance notes and technical notes and their implementation by the institutions that seek clarity within the process. ”
The FAQ for IFSB-19 covers sharīʻah-related disclosure requirements for ṣukūk, disclosure on purification of tainted assets or income for ṣukūk and international collective investment schemes (ICIS), as well as recommendations on takāful or insurance arrangements for ṣukūk issuance.
The FAQ for IFSB-20 provides guidance on supervisory follow-ups, sharīʻah governance, takāful operator models and frameworks, and the supervisory approach on operating takāful windows.
IFSB-21 covers Islamic capital market (ICM) regulations, and FAQs for this standard address questions on the difference between core principles for Islamic finance regulation and IOSCO principles, on issues specific to ICM, regulator responsibility in terms of provisions, and on additional requirements for capital market intermediaries operating in the Islamic capital market.
IFSB-22 is a revised standard, enhancing IFSB-4 with a view to its alignment with global best practices on the principles of market discipline. To assist in understanding the requirements and consistent implementation of the standards, the FAQ for IFSB-22 gives explanatory notes to some of the technical text and interpretation of some of the provisions.
The first set of FAQs were published on four other IFSB standards in
November 2018, relating to capital adequacy, liquidity risk management,
sharīʻah governance and solvency requirements in takāful.
The IFSB welcomes enquiries, suggestions and comments for improvement of the FAQs, providing more clarification of the standards. Comments and suggestions may be sent to: ifsb_sec@ifsb.org.
Details:
The FAQs are available for download on the IFSB website under the ‘Standards Development’ section.