The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) held the 30th meeting of its Governance and Ethics Board (AGEB / the board) recently via video conferencing.
The board primarily discussed the exposure draft of the governance standard “Governance and Management of Investment Accounts”. It aims to set out the principles for the governance and management of investment accounts (IAs) held with, and other participatory instruments (PIs), having a nature similar to IAs, issued by, the Islamic financial institutions. It is expected that the implementation of good governance practices for IAs and other similar PIs through the adoption of the said standard, in turn, would help in improving the overall level of Shari’ah compliance in respect of IAs and enhancing the confidence of current and potential investment accountholders (IAHs) and holders of PIs and stakeholders in IFIs.
The exposure draft covers various aspects including but not limited to core principles of governance of IAs, IAs strategy and policy framework, pre-commencement considerations, considerations at the stage of contract / account opening, ongoing considerations and considerations at redemption of investment..etc.
The chairman of the AGEB, Mr. Farrukh Raza, stated: “I would like to thank all the members, the secretariat and the relevant working group members for their dedication towards the cause of AAOIFI despite all their other commitments.” He added: “I expect once the board finalise the issuance of this significant standard, it will safeguard the reputation of the industry by providing fair and equitable treatment to IAHs and enhancing transparency and disclosures to the best interest of the Islamic finance industry”.
Mr. Omar Mustafa Ansari, the Secretary General, AAOIFI also shared: “I am grateful for the board and the relevant working group members for their time and contributions in improving this significant exposure draft of the governance standard on “Governance and management of investment accounts”. In terms of the way forward, the working group shall elaborate on the comments and recommendations provided by the board for further enhancement and content enrichment. It is expected that the exposure draft be presented to the board for final approval after completing the due process”.