IFSB to Develop Detailed Guidance on Safety Nets in Islamic Finance

The Malaysia-based Islamic Financial Services Board (IFSB) plans to develop more detailed guidance on financial safety nets relating to sharia-compliant transactions in areas such as insolvency and bankruptcy. Such efforts are important as Islamic finance expands in both established and new markets, while transactions are under heightened scrutiny due to the perceived risk of non sharia-compliance or sharia risk. IFSB Secretary General Zahid ur Rehman Khokher said the safety net may include more detailed work on deposit insurance in 2018, while work on dispute resolution and insolvency may be completed later. The IFSB currently has a membership of 75 national regulators. Last month, the IFSB admitted eight new members, including Saudi Arabia’s Capital Market Authority, the Abu Dhabi Global Market and German financial watchdog Bafin.