The Islamic Financial Services Board (IFSB) today released for public consultation two Exposure Drafts (EDs): Guiding Principles of Risk Management and Capital Adequacy Standard for Institutions (other than Insurance Institutions) offering only Islamic Financial Services (IIFS). The EDs, which are the first publications of the IFSB, aim to address the prudential and supervisory issues relating to the specificities of the structure and contents of the Sharī`ah compliant products and services offered by the IIFS. The EDs are meant to complement existing international prudential and supervisory standards.
“Since the inauguration of the IFSB, our goal has been to support the growth of the Islamic financial services industry through the development of prudential standards and best practices. Most of us are aware that the IFSB’s prudential standards will take time to develop and the publication of the two exposure drafts marks the beginning of our effort to enhance the soundness and stability of the financial system in which institutions offering Islamic financial services operate”, said Professor Rifaat Ahmed Abdel Karim, Secretary-General of the IFSB.
The two EDs are available on the IFSB website (Standards & Publications). An Arabic translated version will be made available on the same platform in due course. All comments on the EDs must be in English and should be submitted to the IFSB before or on 15 September 2005 via e-mail [email protected], fax 603-2698 4280, or mail: Islamic Financial Services Board Secretariat, 3rd Floor Block A, Bank Negara Malaysia Building, Jalan Dato’ Onn, 50480 Kuala Lumpur, Malaysia.
During the consultation period, the IFSB Secretariat will be organizing two workshops; one on 23 May 2005 in Doha, Qatar, and the other on 21 June 2005 in Kuala Lumpur, Malaysia. In addition, two public hearings will be held on 25 August 2005 in Kuala Lumpur, Malaysia and on 4 September 2005 in Abu Dhabi, UAE. To attend these events, interested parties are invited to contact the IFSB Secretariat.
The IFSB’s Council is expected to adopt and approve the final version of both EDs in December 2005.
*Note to Editor
The IFSB was officially inaugurated on 3 November 2002. It serves as an international standard setting body of regulatory and supervisory agencies with vested interest to ensure the soundness and stability of the Islamic financial services industry, defined broadly to include banking, capital market and insurance. In advancing its mission, the IFSB will promote the development of a prudent and transparent Islamic financial services industry through introducing new, or adapting existing international standards consistent with Sharī`ah rules and principles, and recommend them for adoption.
At present, the IFSB has 65 members which include, among others, 19 regulatory and supervisory bodies, the World Bank, International Monetary Fund, Islamic Development Bank, Asian Development Bank and Bank for International Settlements.
