Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) held a public hearing of its exposure draft on “Sukuk Governance” in Saudi Arabia. The Capital Market Authority of Saudi Arabia (CMA) hosted the event on
Wednesday, April 17, 2019, at its head office in Riyadh.

Secretary General of AAOIFI, Mr. Omar Mustafa Ansari, presented and discussed the standards with the participants which included Islamic banking and capital market professionals, Shari’ah scholars, accounting, auditing and law experts, researchers, academicians, and other stakeholders.

The public hearing is one of the mandatory steps in the standards development process at AAOIFI, and an opportunity for AAOIFI and the experts in the related fields to interact with and benefit from the knowledge, experience, and wisdom of professional individuals on the proposed standards.

The purpose of developing a standard on ‘Sukuk Governance’ is to recommend principles with an objective to standardize the global practices in this area as well as to provide robust coverage of areas that are crucial for the transparent issuance of instruments and management of investments. The exposure draft sets out the standardized requirements for various stages in Sukuk management that comprise issuance, management, maturity or termination and restructuring phases. This comprehensive coverage will provide a framework which is expected to bring enhanced governance into practice and strengthen the trust in Sukuk markets.

Mr. Ansari lauded the Capital Markets Authority of Saudi Arabia for their support in hosting the AAOIFI public hearing, and also for their active participation and feedback on the exposure draft, which will help refine and make the standard more relevant to cater to the needs of the global Sukuk industry. “Saudi Arabia is one of the largest markets in the global Islamic finance industry and events like these will be beneficial to both the market and AAOIFI in better understanding and resolving the evolving markets challenges. AAOIFI is glad to hold public hearing in the midst of highly qualified and enthusiastic market participants and gain their feedback on its proposed Sukuk governance standard,” he said.

Similar public hearings for the AAOIFI exposure drafts have taken place in different jurisdictions in 2019 including The United Arab Emirates, Bahrain, Malaysia, Saudi Arabia, and Morocco. Further hearings are scheduled to be held in other jurisdictions. All industry feedback received in the form of questions, comments, suggestions, and recommendations during these public hearings will be collated and taken back to the respective Boards for further discussion and deliberation before the issuance of the final standards.

Those interested in providing comments on the Sukuk governance exposure draft may still do so by emailing them to governance@aaoifi.com.