Regulators & Supporting Institutions
Islamic financial institutions are authorised and supervised by the regulator in the country in which they operate. In addition, there are two standard-setting bodies : AAOIFI and IFSB. There are also supporting institutions. Click on each of the below institution to have a detailed explanation for their role.
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- AAOIFI FAS 35 "Risk Reserves" [English].
- AAOIFI FAS 34 "Financial Reporting for Sukuk-holders" [English].
- AAOIFI FAS 33 "Investment in Sukuk Shares and Similar Instrutments" [English].
- AAOIFI FAS 32 "Ijarah" [English].
- AAOIFI FAS 31 "Investment Agency (Al-Wakala Bi Al-Istithmar)" [English].
- AAOIFI FAS 30 "Impairment, Credit Losses and Onerous Commitments" [English].
- AAOIFI FAS 28 "Murabaha and Other Deferred Payment Sales" [English]. FAS 28 [Arabic].
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- AAOIFI ASIFI 6 "External Shari’ah Audit (Independent Assurance Engagement on an Islamic Financial Institution’s Compliance with Shari’ah Principles and Rules)" [English].
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- AAOIFI GSIFI 12 "Sukuk Governance" [English].
- AAOIFI GSIFI 9 "Shari’ah Compliance Function" [English].
- AAOIFI GSIFI 8 "Central Shari’ah Board" [English]. "الهيئةالشرعيةالمركزية" [Arabic].
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- AAOIFI "Code of Ethics for Islamic Finance Professionals" [English]
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- AAOIFI "Shari’ah Standard No. 57 on Gold and its Trading" [English]. AAOIFI Sharia standard 57 [Arabic].
- AAOIFI (November 2017) "Shari’ah Standards for Islamic Institutions-Full text" [English].
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- AAOIFI "Auditing Guidance Note (AGN) No. 02 “Auditor’s Report” [English].
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- IFSB-22 (December 2018) "Revised Standard on Disclosures to Promote Transparency and Market Discipline for Institutions Offering Islamic Financial Services (Banking Segment)"[English]. IFSB-22 [Arabic].
- IFSB-21 (December 2018) "Core Principles for Islamic Finance Regulation (Islamic Capital Market Segment)" [English]. IFSB-21 [Arabic].
- IFSB-20 (December 2018) "Key Elements in the Supervisory Review Process of Takâful/Retakâful Undertakings" [English]. IFSB-20 [Arabic].
- IFSB-19 (April 2017) "Guiding Principles on Disclosure Requirements for Islamic Capital Market Products (Sukûk and Islamic Collective Investment Schemes)" [English]. IFSB-19 [Arabic].
- IFSB-18 (April 2016) "Guiding Principles for Retakāful (Islamic Reinsurance)" [English]. IFSB-18 [Arabic].
- IFSB-17 (April 2015) "Core Principles for Islamic Finance Regulation (Banking Segment)" [English]. IFSB-17 [Arabic].
- IFSB-16 (March 2014) "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)" [English]. IFSB-16 [Arabic]. IFSB-16 [French].
- IFSB-15 (December 2013) "Revised Capital Adequacy Standard for Institutions Offering Islamic Financial Services (Excluding Islamic Insurance (Takāful) Institutions and Islamic Collective Investment Schemes)" [English]. IFSB-15 [Arabic].
- IFSB-14 (December 2013) "Standard on Risk Management for Takāful (Islamic Insurance) Undertakings" [English]. IFSB-14 [Arabic].
- IFSB-13 (March 2012) "Guiding Principles on Stress Testing for Institutions offering Islamic Financial Services" [English]. IFSB-13 [Arabic].
- IFSB-12 (March 2012) "Guiding Principles on Liquidity Risk Management for Institutions offering Islamic Financial Services" [English]. IFSB-12 [Arabic]. IFSB-12 [French].
- IFSB-11 (December 2010) "Standard on Solvency Requirements for Takâful (Islamic Insurance) Undertakings" [English]. IFSB-11 [Arabic].
- IFSB-10 (December 2009) "Guiding Principles on Sharî`ah Governance Systems for Institutions offering Islamic Financial Services" [English]. IFSB-10 [Arabic]. IFSB-10 [French].
- IFSB-9 (December 2009) "Guiding Principles on Conduct of Business for Institutions offering Islamic Financial Services" [English]. IFSB-9 [Arabic]. IFSB-9 [French].
- IFSB-8 (December 2009) "Guiding Principles on Governance for Takâful (Islamic Insurance) Undertakings" [English]. IFSB-8 [Arabic].
- IFSB-7 (January 2009) "Capital Adequacy Requirements for Sukûk, Securitisations and Real Estate Investment" [English]. IFSB-7 [Arabic].
- IFSB-6 (December 2008) "Guiding Principles on Governance for Islamic Collective Investment Schemes" [English]. IFSB-6 [Arabic].
- IFSB-5 (December 2007) "Guidance on Key Elements in the Supervisory Review Process of Institutions offering Islamic Financial Services (Excluding Islamic Insurance (Takâful) Institutions and Islamic Mutual" Funds) [English]. IFSB-5 [Arabic].
- IFSB-4 (December 2007) "Disclosures to Promote Transparency and Market Discipline for Institutions offering Islamic Financial Services (Excluding Islamic Insurance (Takâful) Institutions and Islamic Mutual Funds)" [English]. IFSB-4 [Arabic].
- IFSB-3 (December 2006) "Guiding Principles on Corporate Governance for Institutions offering only Islamic Financial Services (Excluding Islamic Insurance (Takâful) Institutions and Islamic Mutual Funds)" [English]. IFSB-3 [Arabic].
- IFSB-2 (December 2005) "Capital Adequacy Standard for Institutions (other than Insurance Institutions) offering only Islamic Financial Services (IIFS)" [English]. IFSB-2 [Arabic].
- IFSB-1 (December 2005) "Guiding Principles of Risk Management for Institutions (other than Insurance Institutions) offering only Islamic Financial Services (IIFS)" [English]. IFSB-1 [Arabic]. IFSB-1 [French].
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- TN-3 (December 2019) "Technical Note on Financial Inclusion and Islamic Finance" [English].
- TN-2 (December 2016) "Technical Note on Stress Testing for Institutions Offering Islamic Financial Services (IIFS)" [English]. TN-2 [Arabic]. The user guide for TN-2 is available in English and in Arabic.
- TN-1 (March 2008) "Technical Note on Issues in Strengthening Liquidity Management of Institutions Offering Islamic Financial Services: The Development of Islamic Money Markets" [English].
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- GN-7 (December 2019) "Guidance Note on Sharî`ah-compliant Lender-Of-Last-Resort Facilities" [English]. GN-7 [Arabic].
- GN-6 (April 2015) "Guidance Note on Quantitative Measures for Liquidity Risk Management in Institutions Offering Islamic Financial Services (Excluding Islamic Insurance (Takâful) Institutions and Islamic Collective Investment Schemes)" [English]. GN-6 [Arabic]. GN-6 [French].
- GN-5 (March 2011) "Guidance Note on the Recognition of Ratings by external Credit Assessment Institutions (ECAIS) on Takâful and ReTakâful Undertakings" [English]. GN-5 [Arabic].
- GN-4 (March 2011) "Guidance Note in Connection with the IFSB Capital Adequacy Standard: The Determination of Alpha in the Capital Adequacy Ratio for Institutions (other than Insurance Institutions) offering only Islamic Financial Services" [English]. GN-4 [Arabic].
- GN-3 (December 2010) "Guidance Note on the Practice of Smoothing the Profits Payout to Investment Account Holders" [English]. GN-3 [Arabic].
- GN-2 (December 2010) "Guidance Note in Connection with the Risk Management and Capital Adequacy Standards: Commodity Murâbahah Transactions" [English]. GN-2 [Arabic].
- GN-1 (March 2008) "Guidance Note in Connection with the Capital Adequacy Standard: Recognition of Ratings by External Credit Assessment Institutions (ECAIs) on Sharî’ah-compliant Financial Instruments" [English]. GN-1 [Arabic].
The International Islamic Financial Market (known as IIFM) was founded in 2002 in Bahrain. IIFM is a non-profit corporate body that provides Sharia compliant standards for Islamic financial contracts.
IIFM issues standards on: Liquidity management, hedging and trade. IIFM organizes seminars and workshops and publishes annual reports on Sukuk.
Some IIFM standards:
- Liquidity Management Standards
- IIFM standard 6 "Master Collateralized Murabaha Agreement (MCMA)" [English]. IIFM standard 6 [Arabic]. [MCMA’s Operational Guidance Memorandum is available in English and in Arabic]
- IIFM standard 5 "Inter-Bank Unrestricted Master Investment Wakalah Agreement (UMWA)" [English]. IIFM standard 5 [Arabic]. [UMWA’s Operational Guidance Memorandum is available in English and in Arabic]
- Hedging Standards
- IIFM standard 10 "ISDA/IIFM 2017 Credit Support Deed for Cash Collateral (VM)" [English]. IIFM standard 10 [Arabic]. IIFM standard 10 [French].
- Financial Trade Standards
- IIFM standard 12 "IIFM-BAFT Master Funded Participation Agreement" [English]. IIFM standard 12 [Arabic].
- Sukuk reports
- IIFM Sukuk report- 8th edition (July 2019) "A Comprehensive Study of the Global Sukuk Market" [English].
- IIFM Sukuk report- 7th edition (April 2018) "A Comprehensive Study of the Global Sukuk Market" [English].
- IIFM Sukuk report- 6th edition (July 2017) "A Comprehensive Study of the Global Sukuk Market" [English].
- IIFM Sukuk report- 5th edition (March 2016) "A Comprehensive Study of the Global Sukuk Market" [English].
- IIFM Sukuk report- 4th edition (November 2014) "A Comprehensive Study of the Global Sukuk Market" [English].
- IIFM Sukuk report- 3th edition (2013) "A Comprehensive Study of the Global Sukuk Market" [English].
- IIFM Sukuk report- 2th edition (2012) "A Comprehensive Study of the Global Sukuk Market" [English].
- IIFM Sukuk report- 1st edition (2011) "A Comprehensive Study of the Global Sukuk Market" [English].
The International Islamic Liquidity Management Corporation (known as IILM) is based in Malaysia and is an international organization that creates and issues Islamic instruments (such as IILM sukuk) to facilitate Islamic liquidity management. IILM was established in 2010 by the Islamic Corporation for the Development of the Private Sector (known as ICD) as well as several central banks and monetary authorities.
The inaugural Sukuk issuance took place in 2013 and raised USD 490 million. This short term Sukuk (3 months) was rated A-1 by Standard & Poor’s.
- IILM Sukuk
- IILM Primary Dealers List [English]
- The Features of the IILM Sukūk [English]
- IILM Sukuk Factsheet [English]
The Islamic International Rating Agency (known as IIRA) was established in October 2002 and commenced operations in 2005. IIRA is based in Bahrain and is an institution that provides ratings to financial markets by assessing issues and issuers in accordance to Sharia principles.
IIRA’s shareholders body include the Islamic Development Bank (IDB), the Islamic Corporation for the Development of the Private Sector (ICD), rating agencies, banks, insurance companies and other institutions. IIRA has partnerships with both the Malaysian Rating Agency Berhad (MARC) and the Pakistani JCR-VIS Credit Rating Agency.
- Useful resources:
- IIRA’s rating committee.
- IIRA (January 2020) "Methodology for Shari’ah Compliance and Fiduciary Rating" [English].
- IIRA (November 2017) "Awqaf Rating Methodology" [English].
- IIRA (March 2013) "Takaful Rating Methodology" [English].
The Islamic Research and Training Institute (known as IRTI), established in 1981, is a member of the Islamic Development Bank (known as IDB or IsDB). IRTI is one of the biggest research and training institutes in the world. IRTI publishes books and research and offers learning and training programs in Islamic finance.
- Some IRTI publications:
- IRTI "Business Models In Islamic Microfinance" [English].
- IRTI (2013) "قانون الخدمات المالية الإسلامية بماليزيا" [Arabic].