Malaysia: New draft on Shariah governance for Islamic FIs
Source: Middle East Insurance Review | Dec 2017
The Bank Negara Malaysia (BNM) has released an exposure draft aimed to enhance the existing regulatory requirements and expectations on Shariah governance for Islamic financial institutions (FIs).
The draft seeks to strengthen the effectiveness of Shariah governance implementation within Islamic financial institutions due to the growing scale and complexity of Islamic financial business alongside recent policy developments in the area of governance, compliance and risk management, BNM said on its website.
Key enhancements to the framework include strengthening board oversight on accountability and responsibilities over Shariah governance, and enhancing requirements for the Shariah committee in providing objective and sound advice to Islamic FIs, in line with the Islamic Financial Services Act 2013.
Other improvements include enhancing expectations for the board and senior management to promote a Shariah-compliant culture and further integrate Shariah governance considerations in business and risk strategies, and improving the quality of internal control functions to ensure effective management of Shariah non-compliance risks.
BNM has invited written feedback on the proposed regulatory requirements and requested for responses to be submitted by 11 December 2017. M