The IFSB issues Exposure Draft on Disclosure Requirements for Islamic Capital Market Products (Sukūk and Islamic Collective Investment Schemes) for Public Consultation

31 October 2016, Kuala Lumpur – The Islamic Financial Services Board (IFSB) issues Exposure Draft of Guiding Principles On Disclosure Requirements for Islamic Capital Market Products (Sukūk and Islamic Collective Investment Schemes) (ED-19) for Public Consultation starting 31 October 2016 to 31 December 2016, and invites comments from regulatory and supervisory authorities, international organisations, financial institutions, academics and other interested parties.

ED-19 categorises and sets forth a set of general principles that are common to the disclosure of both sukūk and Islamic Collective Investment Schemes (ICIS), as well as specific principles applicable to each sector. The objectives of ED-19 are to:

1. provide a basis for Regulatory and Supervisory Authorities (RSAs) to set rules and guidance on disclosure requirements for Islamic Capital Market (ICM) products, specifically for sukūk and ICIS;
2. outline a basis for RSAs to assess the adequacy of the disclosure frameworks specified by other organisations;
3. provide a comprehensive disclosure framework for participants in the ICM sector; and
4. create harmonisation of regulation and practice in the ICM, and thus facilitate cross-border offerings.

The ED outlines disclosure requirements for sukūk and ICIS, covering the main stages of disclosure, i.e. initial, ongoing, (periodic and immediate) and point-of-sale disclosure. In addition, the document provides guidance on the disclosure requirements for private offerings, government and multilateral issuances, and cross-border issuances with regard to sukūk. It also suggests applications to legal and Sharīʻah–related disclosures, operations-related disclosures as well as disclosures for specialist ICIS. Further guidance has been provided on structure-related disclosures, as well as parties liable for such disclosures.

In line with the IFSB due process on the development of Standards and Guiding Principles, the IFSB will organise a Roundtable on Disclosure Requirements for ICM on 30 November 2016 in Kuala Lumpur, Malaysia and a Public Hearing on ED-19 on 13 December 2016 in Cairo, Egypt. These sessions aim to provide industry stakeholders an opportunity to discuss relevant issues with the IFSB project team in an interactive environment and thus facilitate feedback on the contents of the Exposure Draft. ED-19 will be revised based on the written and oral feedback received during the public consultation process and is planned to be submitted for final approval of the IFSB Council in April 2017.

Participation in the Roundtable and Public Hearing is free and open to all.

The softcopy of ED-19 (English and Arabic) and information on the Roundtable/Public Hearing are available on the IFSB website, www.ifsb.org. Accordingly, the IFSB Secretariat invites all interested parties, especially the IFSB members, to send their comments on the ED to the Secretariat at: [email protected] latest by 31 December 2016.