Islamic Fund Management
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Centralised Shariah Governance
Morocco has adopted a centralised Shariah governance system to issue Shariah standards for
the entire Islamic financial sector. The Higher Council of Ulamas is appointed by the King and
is the only entity in the country authorised to issue fatwas on different matters. The Higher
Council of Ulamas has set up a specialised committee on Islamic finance, i.e. the Conseil
Supérieur des Oulémas (CSO or Council of Scholars), that oversees and approves all aspects of
Shariah compliance for the overall Islamic finance ecosystem in Morocco, as shown
The CSO is composed of nine members and one coordinator, and can add five experts
who will assist the committee in its decisions and orientations (Jouti, 2017). The CSO works
independently of Islamic financial institutions, to ensure credibility and neutrality in terms of
fatwas and opinions. The CSO has to date approved investment deposit products and three
murabahah financing products for Islamic banks.
Since Shariah approval and compliance issues are tackled by only one authority, i.e. the CSO,
there are inevitably many issues that require approval and the process of approval takes
longer. The development of the Islamic fund management market, Islamic stock screening and
Islamic indices are currently in the queue as the existing priority areas are Islamic banking,
takaful and sukuk. Furthermore, the Shariah standards approved are at present only
applicable to the products of Islamic banks (e.g. murabahah for vehicles, real estate and
houses). This means that the fatwas are shared by all the market players. As such, the system
currently does not provide much room for product innovation. This element is expected to
come as the market develops further.
Figure 4.19: One Centralised Entity for Shariah Standards
Source: Jouti (2017)