Islamic Financial Services Board (IFSB), a Malaysia-based standard-setting body for Islamic finance, is set to revise guidelines of overseeing global Islamic financial firms.
The new guidelines will widen the body’s original 2007 document called IFSB-5 to add regulatory capital, corporate governance, stress testing, securitisation exposures, liquidity, concentration and counterparty risk, reported Reuters. Furthermore, they will offer detailed guidance on Islamic windows, a common practice currently in several majority-Muslim countries.
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IFSB secretary-general Jaseem Ahmed told Reuters that the latest revision supports stricter Basel rules.
"Overall the revisions are significant, in particular the areas which were not envisaged in the IFSB-5," Ahmed said.
Ahmed further said that the latest revision is broadly similar to Pillar 2 of the Basel accords.
IFSB, which has 187 members, has issued guidelines on liquidity risk management and stress testing over the past 12 months.
IFSB is planning to disclose the revised standards on 9 December in Qatar. However, the final version of revised guidelines is expected to be published in April 2014.
