Islamic Financial Services Board (IFSB) - The IFSB adopts Standards on Islamic Collective Investment Schemes and Sukūk Securitisation

Kuala Lumpur, February 20, 2009 – The Council of the Islamic Financial Services Board (IFSB) has afresh adopted two new standards which are now accessible for download from the IFSB website – ifsb.org . The two Standards are:

1. Guiding Principles on Governance for Islamic Collective Investment Schemes (IFSB-6)
2. Capital Adequacy Requirements for Sukūk Securitisations and Real Estate Investment (IFSB-7)

The two abstracts accompaniment the absolute IFSB Standards, namely the Capital Adequacy Standard for Institutions alms alone Islamic Financial Services (IFSB-2), and the Guiding Principles on Corporate Governance for Institutions alms alone Islamic Financial Services (IFSB-3), which were issued in 2005 and 2006, respectively.

Guiding Principles on Governance for Islamic Collective Investment Schemes (IFSB-6)

IFSB-6 complements IFSB-3 and added internationally recognised babyminding standards, by reinforcing all-embracing best practices, while acclamation the specificities of babyminding for Islamic Collective Investment Schemes (ICIS).

The capacity of IFSB-6 are disconnected into four parts:
1. Part I relates to the access to accepted governance, whereby the acceptance of acceptable babyminding practices as assigned in added internationally accustomed babyminding standards is reinforced;
2. Part II addresses accuracy and acknowledgment issues and aims to advance the advice ambiance for ICIS investors. It aswell builds on, amidst added things, the acknowledgment requirements recommended beneath the IFSB Disclosures to Promote Transparency and Market Discipline for Institutions Offering Islamic Financial Services (Excluding Islamic Insurance (Takaful) Institutions and Islamic Mutual Funds) (IFSB-4);
3. Part III focuses on acquiescence with Sharī`ah rules and attempt and addresses assorted specificities of ICIS that cover (a) the action of portfolio screening by ICIS Operators; (b) the role of Sharī’ah advisers in ecology connected acquiescence with the Sharī’ah; and (c) the action of ablution of attenuated income; and
4. Part IV examines added aegis appropriate by ICIS investors by highlighting, a allotment of others, the charge for able representation for investors in the organs of babyminding of ICIS as able-bodied as some industry practices that may crave afterpiece oversight.

Capital Adequacy Requirements for Sukūk Securitisations and Real Estate Investment (IFSB-7)

IFSB-7 deals with aspects apropos to authoritative basic requirements for Sukūk that are not covered in the IFSB-2. These are:

(a) Capital requirements for IIFS that are holders of Sukūk which do not represent the holder's proportional buying in an absorbed allotment of an basal asset (or basin of assets) area the holder assumes all rights and obligations absorbed to such an asset or basin of assets.

(b) The basic analysis of securitisation exposures, i.e. the exposures of an IIFS area it is, or acts in a accommodation of an originator, issuer or servicer of a Sukūk arising The Standard deals with (i) the altitude that charge to be met in adjustment for securitisation exposures to be derecognised or minimised; and (ii) the basic analysis of such exposures by IIFS aloft their occurrence.

This Standard applies to both basic and arising IIFS (including basic IIFS that advance in Sukūk that they themselves originate).

For absolute acreage investment, this Standard deals primarily with the basic requirements for an IIFS that invests its own funds in absolute acreage investment activities. In addition, the Standard stresses on the charge for the authorities authoritative IIFS to set adapted beginning banned for IIFS that accept absolute acreage investment activities and costs activities involving absolute acreage exposures.

All the IFSB Standards, Guidelines and Exposure Drafts are accessible at the IFSB website www.ifsb.org

The Islamic Financial Services Board (IFSB), which is based in Kuala Lumpur, serves as an international-standard ambience anatomy of authoritative and authoritative agencies that accept vested absorption in ensuring the acumen and adherence of the Islamic banking casework industry, which is authentic broadly to cover banking, basic bazaar and insurance. In advancing this mission, the IFSB promotes the development of a advisable and cellophane Islamic banking casework industry through introducing new, or adapting absolute all-embracing standards connected with Islamic Shari'ah principles, and acclaim them for adoption.

The 178 associates of the IFSB cover 42 authoritative and authoritative authorities as able-bodied as International Monetary Fund, The World Bank, Bank for International Settlements, Islamic Development Bank, Asian Development Bank, and 130 bazaar players and able firms operating in 34 jurisdictions.

Siham Ismail
Islamic Financial Services Board
Kuala Lumpur, Malaysia
Email: siham@ifsb.org
Tel: + 603 2698 4248 ext. 119