IFSB Adopts Islamic Capital Market Products Rules

EghtesadOnline: In its 30th meeting held in Kuala Lumpur, Malaysia, the Council of the Islamic Financial Services Board approved the Guiding Principles on Disclosure Requirements for Islamic Capital Market Products (sukuk and Islamic collective investment schemes) on Thursday.

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08 April 2017

The document –dubbed IFSB-19 –outlines disclosure requirements for sukuk and ICIS, covering the main stages of disclosure, i.e. initial, ongoing, periodic, immediate and point-of-sale disclosure.

In addition, the measure provides guidance on disclosure requirements for private offerings, government and multilateral issuances, as well as cross-border issuances with regard to sukuk.

IFSB-19 also suggests applications to legal and shariah–related disclosures, operations-related disclosures as well as disclosures for specialist investment schemes, IFSB reported on its website.

According to Financial Tribune, further guidance has been provided on structure-related disclosures, as well as parties liable for such disclosures.

The IFSB council meeting, which was hosted by the Central Bank of Iran and Bank Negara Malaysia, was held in Kuala Lumpur, Malaysia.

IFSB-19 categorizes and sets forth a set of general principles that are common to the disclosure of both sukuk and ICIS, as well as specific principles applicable to each sector. The objectives of IFSB-19 are to:

1. Provide a basis for regulatory and supervisory authorities to set rules and guidance on disclosure requirements for Islamic capital market products, specifically for sukuk and ICIS;

2. Outline a basis for RSAs to assess the adequacy of the disclosure frameworks specified by other organizations;

3. Provide a comprehensive disclosure framework for participants in the ICM sector; and

4. Create harmonization of regulation and practice in ICM and facilitate cross-border offerings.

The board announced that the soft copies of IFSB-19 will be available on the IFSB website, www.ifsb.org, in both English and Arabic languages in due course.

The meeting was attended by 13 governors and deputy governors of regulatory and supervisory authorities, and eight senior representatives from among the council and full members of IFSB, representing 15 countries. It was  also attended by Dr. Bandar Hajjar, president of the Islamic Development Bank and was chaired by Fazle Kabir, deputy chairman of the IFSB council and governor of Bangladesh Bank.

The council meeting is followed by IFSB’s 15th General Assembly and the 15th Islamic Financial Stability Forum.

The Kuala Lumpur-based IFSB was officially inaugurated on Nov. 3, 2002, and started operations on March 10, 2003. It serves as an international standard-setting body of regulatory and supervisory agencies that have interest in ensuring the soundness and stability of the Islamic financial services industry, which is defined broadly to include banking, capital market and insurance.