Disclosures to Promote Transparency and Market - IFSB
Disclosures to Promote Transparency and Market - IFSB
Disclosures to Promote Transparency and Market - IFSB
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SECTION 6:<br />
GENERAL GOVERNANCE AND SHARĪ`AH GOVERNANCE DISCLOSURES<br />
67. <strong>Disclosures</strong> of general <strong>and</strong> Sharī`ah governance are designed <strong>to</strong> provide<br />
information on the structure, processes <strong>and</strong> functioning of such governance in an IIFS.<br />
An important objective of these disclosures is <strong>to</strong> ensure transparency regarding Sharī`ah<br />
compliance by IIFS.<br />
68. International st<strong>and</strong>ards, codes <strong>and</strong> best practices of corporate governance, such<br />
as Principles of Corporate Governance issued by the OECD, <strong>and</strong> Enhancing Corporate<br />
Governance for Banking Organisations issued by the Basel Committee on Banking<br />
Supervision, <strong>and</strong> other relevant governance st<strong>and</strong>ards, are congruent with these aims<br />
<strong>and</strong>, where relevant, are complementary in terms of guidance for appropriate disclosures.<br />
69. The <strong>IFSB</strong>’s Corporate Governance St<strong>and</strong>ard deals with four areas: general<br />
governance approach; rights of IAH; compliance with Sharī`ah rules <strong>and</strong> principles; <strong>and</strong><br />
transparency of financial reporting in respect of investment accounts.<br />
70. Various corporate <strong>and</strong> Sharī`ah governance practices are adopted by different<br />
IIFS in different countries. In particular, some countries have a national Sharī`ah authority<br />
that issues or approves the applicable Fatāwa, while in other countries, each IIFS has a<br />
Sharī`ah board which issues the applicable Fatāwa for that IIFS.<br />
71. An IIFS shall make disclosures of the structure, processes <strong>and</strong> functioning of its<br />
general <strong>and</strong> Sharī`ah governance. Such disclosures shall include the rights of IAH,<br />
compliance with Sharī`ah rules <strong>and</strong> principles, <strong>and</strong> transparency of financial reporting in<br />
respect of investment accounts. 53<br />
53 Arrangements for moni<strong>to</strong>ring Sharī`ah compliance by an IIFS also differ. With specific reference <strong>to</strong><br />
Sharī`ah compliance, the tables in this St<strong>and</strong>ard, taken <strong>to</strong>gether with other relevant governance st<strong>and</strong>ards<br />
include disclosure requirements that are designed <strong>to</strong> allow stakeholders <strong>to</strong> judge whether the corporate<br />
governance arrangements of the IIFS are such as reasonably <strong>to</strong> ensure Sharī`ah compliance.<br />
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