National and Global Islamic Financial Architecture:
Problems and Possible Solutions for the OIC Member Countries
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6.3. Infrastructure Institutions at the International Level
As the Islamic financial industry grows, there are certain issues that can facilitate the
promotion of the Islamic financial industry and architecture at the national levels.
Furthermore, there are certain cross border operations that would require the harmonization
of laws and regulations and standardized accounting and auditing standards to mitigate legal
risks. The areas in which the international level institutions provide support and the gaps for
different types of architectural institutions are discussed in this section. Note that the way in
which these gaps can be filled are discussed in the next chapter.
6.3.1. Legal Infrastructure
Table 6.11 shows that among the legal infrastructure, only one international institution, the
International Islamic Center for Reconciliation and Commercial Arbitration (IICRCA) is
providing an alternative dispute resolution and reconciliation platform to settle international
disputes arising in the Islamic financial industry applying Islamic law for disputes. However, in
other areas of the infrastructure, there are no other international bodies contributing to
supporting the legal framework for Islamic finance.
Table ‎6.11: International Institutions Related to Legal Infrastructure
No. Institutional Elements Existing
Institutions
Role and Responsibilities
1.1 Islamic financial laws
1.2 Supporting Laws for
Islamic Financial sector
1.3 Appropriate dispute
resolution framework
 IICRCA  Alternative dispute resolution platform
for Islamic finance using Islamic law
1.4 Bankruptcy Framework
and Resolution of banks
6.3.2. Regulation and Supervision
While in conventional finance different regulatory standard setting bodies exist for banking
(BCBS), insurance (IAIS) and capital markets (IOSCO), the Islamic Financial Services Board
(IFSB) is the regulatory standard setter for the Islamic financial sector. It has published
standards, guiding principles, guidance notes and technical note for the body of Islamic banks,
takaful and Islamic capital markets.
Table ‎6.12: International Institutions Related to Regulations
No. Institutional
Elements
Existing
Institutions
Role and Responsibilities
2.1 Islamic financial
regulations
 IFSB  Publish standards and guidelines for
regulations and supervision of Islamic
banking, takaful and Islamic capital markets
The specific regulatory and supervisory standards and guidance notes published by IFSB to
date are shown in Table 6.13. As can be seen, while the regulatory standards for Islamic