The IFSB Publishes Second Set of Frequently Asked Questions (FAQs) on four of its Standards on Disclosure Requirements for ICM Products, ICM Regulation, Supervisory on Takāful and Retakāful, and Transparency and Market discipline for IIFS
Date posted: 30 December 2019
Kuala Lumpur, 30 December 2019 – The second set of FAQs are aimed to promote implementation of IFSB standards globally, through presenting clarifications and explanative directions on the issued standards. Today’s publication covers selected FAQs on four IFSB standards, namely: “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). It should be noted, that the first set of FAQs on another four IFSB standards were published on 1st November 2018 (give the hyperlink) and relates to the Capital Adequacy, Liquidity Risk Management, Sharīʻah Governance and Solvency Requirements in Takāful.
The Secretary-General of the IFSB, Dr. Bello Lawal Danbatta commented on the importance of providing consistent technical support by FAQs publication: “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. ”
FAQs for IFSB-19 gives explanation, among other things, on Sharīʻah related disclosure requirements for ṣukūk, disclosure on purification of tainted assets or income for ṣukūk and ICIS, as well as recommendation on takāful or insurance arrangement for ṣukūk issuance.
The FAQ responses for IFSB-20 provide guidance on supervisory follow-up, Sharīʻah governance, takāful operator’s model and framework, and supervisory approach on takāful windows operation.
IFSB-21 covers the Islamic Capital Market’s (ICM) regulation, and FAQs for that standard was develop to address questions on difference between core principles for Islamic finance regulation and IOSCO principles, on issues specific to ICM, regulator’s responsibility in terms of provisions, and on additional requirements for capital market intermediaries operating in the Islamic capital market.
The fourth standard – IFSB-22 –is a revised standard, enhanced the IFSB-4 with a view to its alignment with global best practice on the principles of market discipline. To assist in understanding the requirements and consistent implementation of the standards, FAQ for IFSB-22 gives explanatory notes to some of the technical text and interpretation of some of the provisions.
The IFSB welcomes enquires, suggestions and comments for improvement of the FAQs, providing more clarification of the standards. Comments and suggestions may be sent to: [email protected]. These FAQs are available on the IFSB website under the ‘Standards Development’ section for download: www.ifsb.org.
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