The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) in collaboration with the Islamic Financial Services Board (IFSB) issued the exposure draft of the governance standard on revised Shari’ah governance framework for institutions offering Islamic financial services (RSGF).

The exposure draft was approved respectively by the AAOIFI Governance and Ethics Board (AGEB / the Board) and the Technical Committee of IFSB, after a rigorous joint effort by both primary standard-setting institutions, with due involvement of regulators and stakeholders through their contribution as joint working group members. The standard once finalized, will replace fully, or partially, certain earlier standards issued previously by both institutions.

The Chairman of the AGEB, Mr. Farrukh Raza, stated: “I would like to express my appreciation to AGEB, IFSB’s Technical Committee, the joint working group members, the joint Shari’ah committee and the secretariats of AAOIFI and IFSB for their efforts and dedication which aims at addressing the evolving needs of the global Islamic finance industry”. He added: “I am confident once this standard is finalized it will improve the quality of Shari’ah governance across Islamic financial institutions around the globe, while optimizing the costs by providing comprehensive guidance on best practices for various elements of Shari’ah governance”.

On this occasion, Mr. Omar Mustafa Ansari, the Secretary General, AAOIFI stated: “At AAOIFI, we are pleased to have this successful collaboration with IFSB where the efforts of the two leading standard-setting bodies have been combined for the benefit of the Islamic finance industry. We are certain that this collaboration will assist the industry in optimizing Shariah governance with standardized and harmonized guidelines. I look forward to maintaining our mutual collaboration in supporting the needs and development of the Islamic finance industry.”

The release of the exposure draft invites the public comments to facilitate the stakeholder engagement process, multiple public hearings will be conducted over the coming weeks. Any suitable changes and improvements suggested by the industry stakeholders and received in public comments will be incorporated to the draft. The final standard will be issued after the due process of reviews and approvals by both institutions.

Comments on the exposure draft are welcomed and should be sent to:

Governance@aaoifi.com or public_consultation@ifsb.org

The exposure draft on revised Shari’ah governance framework can be accessed by CLICKING HERE