The Islamic Financial Services Board (IFSB) is an international standard-setting organisation which started operations on 10 March 2003. The organisation promotes and enhances the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry, broadly defined to include banking, capital markets and insurance sectors.
The IFSB has now published Core Principles for Islamic Finance Regulation (Banking Segment). The document containing the core principles is structured in four sections. Following the introduction in section 1, section 2 presents an overview of the preconditions for effective supervision of Islamic financial services (IIFS). Section 3 outlines the use of the assessment methodology in assessing compliance with the core principles, and practical considerations in conducting an assessment. Section 4 sets out the core principles in full, with their associated assessment criteria.
The IFSB states that the core principles should be implemented by supervisory authorities in compliance with Sharī`ah and within the legal framework of their respective jurisdictions. The IFSB expects its members to start implementing the standard from January 2016 (or later where the relevant application date of an underlying IFSB standard is a later date), meaning that by this date the guidance should be transposed into national supervisory guidelines and be reflected in the national supervisory manuals/handbooks, where applicable, and implemented in supervisory practices.
View IFSB issues core principles for Islamic finance regulation – banking segment, 16 April 2015