IFR 3.5 IFR 3.5 Shari'a Supervisory Board
IFR 3.5 Guidance
Article 13 of the Law Regulating Islamic Financial Business 2004 requires an
Authorised Personundertaking Islamic Financial Businessto appoint a Shari'a Supervisory Board.
IFR 3.5.1 IFR 3.5.1
Authorised Personappoints a Shari'a Supervisory Board, it must ensure that:(a) the Shari'a Supervisory Boardhas at least three members;(b) the members appointed to the Shari'a Supervisory Boardare competent to perform their functions as Shari'a Supervisory Boardmembers;(c) any appointments, dismissals or changes in respect of members of the Shari'a Supervisory Boardare approved by the Governing Bodyof the Authorised Person; and(d) no member of the Shari'a Supervisory Boardis a director or Controllerof the Authorised Person.
IFR 3.5.1 Guidance
For the purposes of IFR Rule 3.5.1, an
Authorised Personshould consider the previous experience and qualifications of the proposed Shari'a Supervisory Boardmembers to assess whether the proposed Shari'a Supervisory Boardmember is competent to advise on the Islamic Financial Businessto be undertaken by the Authorised Person.
Authorised Personmust 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 Boardmembers will be considered; and(c) the remuneration of the members of the Shari'a Supervisory Board.
IFR 3.5.3 IFR 3.5.3
Authorised Personmust establish and maintain, for six years, records of:(a) its assessment of the competency of the Shari'a Supervisory Boardmembers;(b) the agreed terms of engagement of each member of the Shari'a Supervisory Board; and
IFR 3.5.3 Guidance
The records of the assessment of competency of
Shari'a Supervisory Boardmembers should clearly indicate; at least:a. the factors that have been taken into account when making the assessment of competency;b. the qualifications and experience of the Shari'a Supervisory Boardmembers;c. the basis upon which the Authorised Personhas deemed that the proposed Shari'a Supervisory Boardmember is suitable; andd. details of any other Shari'a Supervisory Boardsof which the proposed Shari'a Supervisory Boardmember is, or has been, a member.
IFR 3.5.4(1) The
Authorised Personmust ensure that the Islamic Financial Businesspolicy and procedures manual it is required to maintain under IFR Rule 3.4.1 provides that:(a) a member of the Shari'a Supervisory Boardis obliged to notify the Authorised Personof any conflict of interest that such member may have with respect to the Authorised Personor, in the case of an Investment Trust, the Trustee; and(b) the Authorised Personwill take appropriate steps to manage any such conflict of interest so that the Islamic Financial Businessis carried out appropriately and in compliance with Shari'a, the interest of a Clientis not adversely affected and all Clientsare fairly treated and not prejudiced by any such interests.(2) If an Authorised Personis unable to manage a conflict of interest as provided above, it must dismiss or replace the member as appropriate.
If requested by the DFSA, an
Authorised Personmust provide the DFSA with information on its appointed or proposed Shari'a Supervisory Boardmembers with regard to the qualifications, skills, experience and independence of the Shari'a Supervisory Boardmembers.
Authorised Personmust take reasonable steps to ensure that it and its Employees:(a) provide such assistance as the Shari'a Supervisory Boardreasonably requires to discharge its duties;(b) give the Shari'a Supervisory Boardright of access at all reasonable times to relevant records and information;(c) do not interfere with the Shari'a Supervisory Board'sability to discharge its duties; and(d) do not provide false or misleading information to the Shari'a Supervisory Board.