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GLOBAL:
During its 24th Meeting in Brunei yesterday, the Council of
the Islamic Financial Services Board (IFSB) passed two resolutions: the
adoption of a new standard and the admission of Bank of Korea as an
Associate Member.
The new standard, known as IFSB-16, is the Revised Guidance on Key
Elements in the Supervisory Review Process of Institutions Offering
Islamic Financial Services, which excludes Takaful institutions and
Islamic collective investment schemes.
The revised standard is an updated version of an earlier standard (IFSB-5)
that enumerates key elements in the supervisory review process for
authorities supervising institutions offering Islamic financial services
(IIFS). It takes into account the specificities of each IIFS, the lessons
learned from the global financial crisis, and concurrently complements
the existing international guidance on the supervisory review process
issued by the Basel Committee on Banking Supervision (BCBS).
The IFSB-16 pertains to the supervisory process and how regulatory
authorities should supervise various specific areas pertinent to the
IIFS. It also ensures that the supervisory review process covering IIFS
is consistent with those for conventional institutions and relevant to
the current state of the industry, in accordance with the particularity
of Shariah compliant financial transactions; and promotes the financial
soundness of the IIFS.
In addition, the IFSB-16 seeks to foster convergence towards best
practice amongst authorities supervising IIFS by establishing a minimum
standard which enables relevant supervisory authorities to meet
requirements when carrying out their duties. According to an emailed
statement, a copy of the IFSB-16 will soon be available on the IFSB
website.
Including the Bank of Korea, the IFSB has 184 members comprising of 59
supervisory and regulatory authorities from the banking, capital markets
and Takaful sectors in 45 jurisdictions, as well as eight international
inter-governmental organisations, and 117 market players involving
financial institutions, professional firms and industry associations.
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