National and Global Islamic Financial Architecture:
Problems and Possible Solutions for the OIC Member Countries
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In viewing the development and sophistication in Islamic finance transactions, POA is now
considered as insufficient for the needs of the Islamic finance industry in Turkey (PBAT, 2015:
40). For this PBAT (2015) suggests the formation of a team within POA versed in Islamic
finance related accounting and standard needs so that specific accounting standards can be set
for a robust development of the industry.
BRSA, as mentioned, is “the authority over the inspection of statutory auditors within banking
sector. Auditing of the banks is considered as regulated through based on Banking Law No.
5411 in current situation” (POA, 2015: 45). This applies to participation banks as well.
Requirements on auditing with respect to capital market institutions and publicly held firms
(with the exception of publicly held banks and insurance companies) under the Capital
Markets Law are determined by the Capital Markets Law as well as the Communiqués of the
CMB.
In Turkey all banks, including participation banks, are subject to the same disclosure
requirements, which stems from the Banking Law and other related regulations, CMB Law and
Related Regulations, and its corporate governance policies, Commercial Law, Regulation of
Borsa Istanbul and other related legislations, and POA’s requirements.
Rating Agencies
There are nine rating agencies operating in Turkey, three of which are international rating
agencies recognised by the CMB.35 The regulation of financial market rating activities is
regulated by CMB and BRSA. CMB’s jurisdiction in regulating the rating activities is related to
capital markets in relation to credit rating and corporate governance compliance. On the other
hand, BRSA’s regulation on authorisation and activities of Rating Institutions was recently
amended. The amendments as published in Official Gazette No. 29599, which came into effect
on 31/03/2016, aim at ensuring “the independence and neutrality of credit rating activities.
Regulatory changes also address credibility and reliability checks, exemptions for international
credit rating agencies in Turkey, rating methodologies, as well as notice submissions” (Moroglu
and Aydin, 2016, February 03). It should be noted that one of the limitations of issuance of
sukuk in Turkey is the lack of credit ratings (TR and IRTI 2014:92). However, recently Turkey
has issued international sukuk rated by international rating agencies such as Fitch and
Moodys.36
35 See: CMB Website
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