• IFR 3.5 IFR 3.5 Shari'a Supervisory Board

    • IFR 3.5.1

      Where an Authorised Person has been granted a Financial Services Permission to conduct Islamic Financial Business it shall comply at all times with the following:
      (a) An Authorised Person that has a Financial Services Permission authorising it to conduct Islamic Financial Business as an Islamic Financial Institution shall appoint a Shari'a Supervisory Board.
      (b) An Authorised Person that has a Financial Services Permission authorising it to conduct Islamic Financial Business through an Islamic Window shall appoint a Shari'a Supervisory Board.
      (c) The Regulator may make, vary or withdraw rules prescribing the appointment, formation, conduct and operation of a Shari'a Supervisory Board.

    • IFR 3.5.2 IFR 3.5.2

      When an Authorised Person appoints a Shari'a Supervisory Board, it must ensure that:

      (a) the Shari'a Supervisory Board has at least three members;
      (b) the members appointed to the Shari'a Supervisory Board are competent to perform their functions as Shari'a Supervisory Board members;
      (c) any appointments, dismissals or changes in respect of members of the Shari'a Supervisory Board are approved by the Governing Body of the Authorised Person; and
      (d) no member of the Shari'a Supervisory Board is a director or Controller of the Authorised Person.

      • Guidance

        For the purposes of IFR 3.5.2, an Authorised Person should consider the previous experience and qualifications of the proposed Shari'a Supervisory Board members to assess whether the proposed Shari'a Supervisory Board member is competent to advise on the Islamic Financial Business to be undertaken by the Authorised Person.

    • IFR 3.5.3

      An Authorised Person must document its policy in relation to:

      (a) how appointments, dismissals or changes will be made to the Shari'a Supervisory Board;
      (b) the process through which the suitability of Shari'a Supervisory Board members will be considered; and
      (c) the remuneration of the members of the Shari'a Supervisory Board.

    • IFR 3.5.4 IFR 3.5.4

      An Authorised Person must establish and maintain, for six years, records of:

      (a) its assessment of the competency of the Shari'a Supervisory Board members;
      (b) the agreed terms of engagement of each member of the Shari'a Supervisory Board; and
      (c) the matters in IFR 3.5.2(c) and 3.5.3.

      • Guidance

        The records of the assessment of competency of Shari'a Supervisory Board members should clearly indicate; at least:

        (i) the factors that have been taken into account when making the assessment of competency;
        (ii) the qualifications and experience of the Shari'a Supervisory Board members;
        (iii) the basis upon which the Authorised Person has deemed that the proposed Shari'a Supervisory Board member is suitable; and
        (iv) details of any other Shari'a Supervisory Boards of which the proposed Shari'a Supervisory Board member is, or has been, a member.

    • IFR 3.5.5

      (a) The Authorised Person must ensure that the Islamic Financial Business policy and procedures manual it is required to maintain under IFR 3.4.1 provides that:
      (i) a member of the Shari'a Supervisory Board is obliged to notify the Authorised Person of any conflict of interest that such member may have with respect to the Authorised Person or, in the case of an Investment Trust, the Trustee; and
      (ii) the Authorised Person will take appropriate steps to manage any such conflict of interest so that the Islamic Financial Business is carried out appropriately and in compliance with Shari'a, the interest of a client is not adversely affected and all clients are fairly treated and not prejudiced by any such interests.
      (b) If an Authorised Person is unable to manage a conflict of interest as provided above, it must dismiss or replace the member as appropriate.

    • IFR 3.5.6

      If requested by the Regulator, an Authorised Person must provide the Regulator with information on its appointed or proposed Shari'a Supervisory Board members with regard to the qualifications, skills, experience and independence of the Shari'a Supervisory Board members.

    • IFR 3.5.7

      An Authorised Person must take reasonable steps to ensure that it and its Employees:

      (a) provide such assistance as the Shari'a Supervisory Board reasonably requires to discharge its duties;
      (b) give the Shari'a Supervisory Board right of access at all reasonable times to relevant records and information;
      (c) do not interfere with the Shari'a Supervisory Board's ability to discharge its duties; and
      (d) do not provide false or misleading information to the Shari'a Supervisory Board.