The IFSB Working paper on Intermediaries in the Islamic Capital Market
Date posted: 24 December 2019
Kuala Lumpur, 24 December 2019 – The Islamic Financial Services Board (IFSB) today issued its 13th research in the Working Paper series, WP-13: Intermediaries in the Islamic Capital Market (ICM), which investigates the pertinent role played by intermediaries in the ICM. This working paper, which is basically exploratory in nature, considers four key core principles in IFSB-21: Core Principles for Islamic Finance Regulation (Islamic Capital Market Segment) relating to ICM intermediaries’ assessment of issues affecting their intermediation activities in IFSB jurisdictions.
The Secretary-General of the IFSB, Dr. Bello Lawal Danbatta stated, “This Paper is the fourth issuance in the IFSB’s Working Paper series this year”. He further added, “the changing market landscape where ICM intermediaries operate today makes managing their fiduciary responsibility towards their clients very complicated. As such, this working paper provides some exploratory findings on the market conduct, client protection, and the safety and soundness of the ICM intermediaries.”
The findings in WP-13 reveal that there are commendable licensing and entry requirements in place in various jurisdictions, as well as ongoing assessments of due compliance by ICM intermediaries with those requirements. While the ICM intermediaries are susceptible to conflict-of-interest risk, they nonetheless generally have internal mechanisms catering for the consequences arising therefrom. Finally, there seem to be procedures in place that provide early warning of potential failure of the ICM intermediaries prior to their infringing on the soundness and safety of the Islamic capital market.
WP-13 is available for download from the IFSB website: www.ifsb.org.
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