Kuala Lumpur, March 1, 2010 – In its 20th meeting held on 18 February 2010 in Dubai, United Arab Emirates, the Technical Committee of the Islamic Financial Services Board (IFSB) approved the issuance of the following two Exposure Drafts (EDs):
Guidance Note in Connection with the Risk Management and Capital Adequacy Standards: Commodity Murābahah Transactions (CMT).
This Guidance Note aims to highlight the risks associated with CMT and to guide supervisory authorities to assess their implications to the regulatory capital requirements of institutions offering Islamic financial services (IIFS). In addressing these risk management and capital adequacy issues, the document complements the existing IFSB Guiding Principles of Risk Management for IIFS (IFSB-1) and IFSB Capital Adequacy Standard (IFSB-2), both of which were issued in 2005.
Guidance Note on the Practice of Smoothing the Profits Payout to Investment Account Holders
This Guidance Note aims to address various issues related to the smoothing of profits payout to investment account holders by IIFS. The document recommends to supervisory authorities best practices for regulating and standardising the smoothing techniques. The Guidance Note complements a number of IFSB standards and guiding principles including IFSB-1, IFSB-2, Guiding Principles on Corporate Governance (IFSB-3) and Disclosure to Promote Transparency and Market Discipline for IIFS (IFSB-4).
The three-month public consultation period, which begins 1 March 2010, is part of the due process for the issuance of the IFSB EDs. The IFSB Secretariat invites all interested parties, including the IFSB members, to comment on the EDs and send them to the IFSB Secretariat ([email protected]) by 31 May 2010.
The EDs can be downloaded from the IFSB website at www.ifsb.org.
