Bandar Seri Begawan, 27 March 2014 – The Council of the Islamic Financial Services Board (IFSB) has resolved to approve the adoption of a new Standard in its 24th Meeting in Bandar Seri Begawan, Brunei Darussalam, today. The document is Revised Guidance on Key Elements in the Supervisory Review Process of Institutions Offering Islamic Financial Services (Excluding Islamic Insurance (Takāful) Institutions and Islamic Collective Investment Schemes), or IFSB-16.
The 24th meeting of the IFSB Council, hosted by Autoriti Monetari Brunei Darussalam (AMBD), was held on 27 March 2014 at the Empire Hotel and Country Club in Brunei Darussalam. It was chaired by the Managing Director, AMBD, H.E. Dato Mohd Rosli Sabtu and attended by 10 central bank governors and heads of regulatory and supervisory authorities, as well as 12 senior representatives from among the Council and Full members of the IFSB, representing 17 countries. The meeting was also attended by the President of the Islamic Development Bank.
IFSB-16: Revised Guidance on Key Elements in the Supervisory Review Process of Institutions Offering Islamic Financial Services (Excluding Islamic Insurance (Takāful) Institutions and Islamic Collective Investment Schemes)
The overall aim of the revised Standard is to update the earlier standard on this subject (IFSB-5), in setting forth guidance on key elements in the supervisory review process for authorities supervising institutions offering Islamic financial services (IIFS), taking into consideration the specificities of the IIFS, the lessons learnt from the global financial crisis, and, at the same time, to complement the existing international guidance on the supervisory review process issued by the Basel Committee on Banking Supervision (BCBS).
IFSB-16, which is broadly analogous to Pillar 2 of the Basel Accords, is about the supervisory process and how regulatory and supervisory authorities should supervise some specific areas pertinent to the IIFS. It ensures that the supervisory review process covering IIFS is consistent with those for conventional institutions and relevant to the current state of the industry, while catering for the specificities of Sharī`ah-compliant financial transactions and promoting the financial soundness of the IIFS. In this respect, it intends to foster convergence towards best practice among authorities supervising IIFS by establishing a minimum standard, enabling such supervisory authorities to meet their requirements when carrying out the roles expected of them in the light of IFSB Standards.
The softcopy of IFSB-16 will be available on the IFSB website, www.ifsb.org in due course.
The Meeting of the Council was followed by the 12th IFSB General Assembly and the 9th Islamic Financial Stability Forum.
