AAOIFI clarification of media reports.

Accounting and Auditing  Organization  for Islamic Financial Institutions (AAOIFI) has issued clarification of recent news reports.

Referring in particular to news carried by Reuters, AAOIFI said, “In particular, Thomson Reuters had included the following sentences in their reports:

 

  1. AAOIFI plans to improve the operations of sharpie boards by strengthening the certification process for scholars, Fakir said.
  2. AAOIFI will also look at ways of fostering the rise of a new, younger generation of Islamic scholars, through steps such as training courses, Fakir said.
  3. To balance opposition to change within AAOIFI, Fakir seems to want to involve the widest possible range of industry interests in the debate; he called for “rigorous and meaningful discussions…not only among scholars but also with all participants of Islamic finance.”
  4. AAOIFI, one of the top standard-setting bodies in Islamic finance globally, will over the next couple of years conduct a broad review of how the industry operates, addressing issues such as how boards of scholars work, the organization’s secretary-general Khalid Al Fakir said earlier.

AAOIFI clarification of media reports.

(1), and (3) were included in a report entitled “AAOIFI in wide review of Islamic finance standards” dated 29 April 2012 while (4) in a report entitled “AAOIFI issues 7 Shari’s standards for Islamic finance” dated 30 April 2012.

“We would like to clarify that neither AAOIFI nor Dr Khalid R Al-Fakir had issued statements (1), and (4) above.

“The quotation on (3) was given to Thomson Reuters only in response to its written questions relating to AAOIFI’s upcoming Shari’s Conference. Thomson Reuters ‘ written questions were:

  • What is the priority of the themes to be discussed at the conference?
  • What is the level of debate among scholars – which areas remain contentious, if any?
  • What are some of the outcomes expected from the May conference?
  • What is the status of the review of standards, when can we expect an announcement of this?

“In response to Thomson Reuters ‘ specific question on What is the level of debate among scholars – which areas remain contentious, if any?, AAOIFI had submitted a written reply that “we are hoping for rigorous and meaningful discussions at the conference, not only among scholars but also with all participants of Islamic finance industry. In particular, we would like to see insightful debate on Repo and hedging that can help us develop standards that can benefit the industry.”

“AAOIFI had also provided Thomson Reuters with the following status relating to work program for accounting and governance standards:

Review of accounting standard on Investments in Real Estate – exposure draft released in Jan 2012, final standard expected to be issued in 2nd half of 2012.

Review of accounting standards on Investment Accounts – consultation note released in Jan 2012, exposure draft expected to be issued in 2nd half of 2012, and final standard in 1st half of 2013.

Review of accounting standards on Takaful – consultation note expected to be released in 2nd half of 2012, exposure drafts from 1st half of 2013, in, final standards from 2nd half of 2013.

Development of new Governance Standard for Sheridan Supervisory Board – consultation note to be released in 2nd half of 2012, exposure draft in 1st half of 2013, final standard in 2nd half of 2013.

“With regards to development of new Governance standard, AAOIFI had stated in our e-mail to Thomson Reuters that the standard was potentially to give guidance relating to relationship between Islamic financial institutions and their Sheridan Supervisory Board. The standard would potentially incorporate additional guidance’s on terms of references for Sheridan Supervisory Board similar to international best practices guidance’s on terms of references for financial institutions’ board of directors. It is to build upon and complement our existing seven governance standards.”

Source:

http://www.cpifinancial.net/news/post/13805/aaoifi-clarification-of-media-reports

AAOIFI LAUNCHES NEW SHARIA GUIDELINES

The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has introduced new guidelines for applying religious law to finance, as it prepares to launch a sweeping review of the industry.

The seven new standards, which help scholars, decide whether financial activities and products conform with Shari law, address issues including financial rights, bankruptcy, capital protection, entrusting money to an agent for investment and contract termination.

Capital protection has been widely discussed in the industry over recent months; some investment firms are keen to offer it in products, but Islamic principles do not allow companies to promise guaranteed returns.

 

AAOIFI LAUNCHES NEW SHARIA GUIDELINES

 

also cover the ways in which financial institutions manage their liquidity, discussing the sources and uses of funds and offering rules for calculating and distributing profits from investment instruments, according to sources.

How to increase liquidity has been a key concern for Islamic banksLast month two global bodies launched a standard contract for Islamic profit rate swaps, which banks can use to manage their exposures over varying time periods.

The Bahrain-based AAOIFI announced the new standards on Sunday after several days of internal discussions among Shari scholars, its deputy secretary-general Karol Noam said.

The standards are being issued first in Arabic and will be translated into English later.

AAOIFI, one of the top standard-setting bodies in Islamic finance globally, will over the next couple of years conduct a broad review of how the industry operates, addressing issues such as how boards of scholars work, the organization’s secretary-general Khalid Al Fakir said earlier.

www.gulf-daily-news.com/NewsDetails.aspx?storyid=329123

AAOIFI issues 7 sharia standards for Islamic finance

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has introduced for applying religious law to finance, as it prepares to launch a sweeping review of the industry.

The seven new standards, which help scholars decide whether financial activities and products conform with sharia law, address issues including financial rights, bankruptcy, capital protection, entrusting money to an agent for investment, and contract termination.

 

AAOIFI issues 7 sharia standards for Islamic finance

AAOIFI issues 7 sharia standards for Islamic finance

Capital protection has been widely discussed in the industry over recent months; some investment firms are keen to offer it in products, but Islamic principles do not allow companies to promise guaranteed returns.

AAOIFI’s new standards also cover the ways in which financial institutions manage their liquidity, discussing the sources and uses of funds and offering rules for calculating and distributing profits from investment instruments.

How to increase liquidity has been a key concern for Islamic banks. Last month two global bodies launched a standard contract for Islamic profit rate swaps, which banks can use to manage their exposures over varying time periods.

The Bahrain-based AAOIFI announced the new standards on Sunday after several days of internal discussions among sharia scholars, its deputy secretary-general Khairul Nizam told Reuters. The standards are being issued first in Arabic and will be translated into English later.

AAOIFI, one of the top standard-setting bodies in Islamic finance globally, will over the next couple of years conduct a broad review of how the industry operates, addressing issues such as how boards of scholars work, the organisation’s secretary-general Khaled Al Fakih said earlier. (Editing by Andrew Torchia)

http://www.reuters.com/article/2012/04/30/islamic-finance-regulation-idUSL6E8EI0SF20120430