AAOIFI panel holds meeting

Manama, Nov. 29 (BNA): The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) held the 9th meeting of its Governance and Ethics Board (AGEB) in Bahrain. The board deliberated on the exposure draft of ‘Sukuk Governance’. The objective of this standard is to set out a framework for governance of Sukuk issuances for the entire lifecycle of such instruments. The standard prescribes the standardised requirements for various stages in Sukuk life stages that comprise issuance, management, maturity or termination and restructuring phases. This comprehensive coverage provides a framework which is expected to bring enhanced governance into practice and strengthen the confidence in Sukuk markets. The board directed the Secretariat to incorporate the required changes and issue the exposure draft for public comments. The public hearings for the exposure draft will be held in the upcoming months in different parts of the world –to obtain industry feedback. Shaikh Esam Es-haq, Deputy Chairman, AGEB, after the meeting said: "Sukuk have emerged as a widely used instrument for investment purposes by sovereigns, corporates and IFIs. Various regulators recognising the essential need to manage this instrument have issued regulations to govern the overall cycle of Sukuk investments, however there are observable disparities in the approach and coverage areas. Considering the situation, the board decided to develop a universal standard in this area in a bid to harmonise and standardise practices in the industry." The board also discussed a report and its work plan that summarises the performance of AGEB and suggests a plan for the remaining term. The board has issued 3 final standards and there are 2 exposure drafts currently in the public hearing stage while 2 exposure drafts are expected to be issued by December. AGEB will continue the Comprehensive Ethics project which has a target deadline for exposure draft completion by mid-year 2019. The members were updated with regard to the progress on the exposure standard of "Sharia Compliance and Fiduciary Rating for Islamic financial institutions. Four public hearings for the exposure draft were held in Turkey, Sudan, Oman and Pakistan. The Secretariat plans further public hearings in UAE, KSA, and Malaysia.