National and Global Islamic Financial Architecture:
Problems and Possible Solutions for the OIC Member Countries
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7.2.5. Information Infrastructure
AAOIFI has published 27 financial accounting standards, 2 codes of ethics and one guidance
note related to accounting and auditing for the Islamic financial sector. Similarly, AAOIFI and
IFSB have issued standards related to disclosure and transparency for Islamic financial
institutions. IFSB, IOSCO and the Securities Commission Malaysia (SCM) published a book
entitled Disclosure Requirements for Islamic Capital Market Products in 2013 (SCM 2103).
However, there are no specific disclosure guidelines issued by IFSB for takaful and Islamic
capital markets sectors. Furthermore, there is a need to have detailed standards related to
Shariah compliance disclosures.
IIRA is the only international rating agency providing ratings of Islamic financial institutions,
Islamic capital market products and Shari’ah Quality Rating (SQR) to assess the status of
Shariah compliance in different financial institutions. As the Islamic financial sector becomes
global, there is a need to come up with international ratings agencies to provide not only credit
ratings of Islamic financial institutions and instruments but also Shariah ratings.
Table ‎7.12: Information Infrastructure
No. Recommendations Existing
Institutions
Gaps Need to be filled Implemented by
5.1 Accounting and auditing
standards
 AAOIFI
5.2 Disclosure and
Transparency
 AAOIFI
 IFSB
 Disclosure guidelines for
takaful and Islamic capital
markets
 Shariah compliance of
products
 AAOIFI
 IFSB
5.3 Rating agencies  IIRA  Appropriate models and
structures for rating risks
in equity based instruments
 Appropriate models and
structures for rating
Shariah compliance
 IIRA
 Other
international
rating agencies.
7.2.6. Consumer Protection & Financial Literacy
While consumer protection principles for the conventional financial sector have been
published by the OECD and G20 (2011) and the World Bank (2012), there are no specific
guiding principles for the Islamic financial sector. Although the IFSB has issued Guiding
Principles on Conduct of Business in 2009, there is a need to come up with specific guidelines
that deal with protecting consumers of Islamic financial institutions.
While recognizing that IFSB has published a working paper and IADI (2010) has published a
discussion paper on Shariah compliant deposit insurance, no specific models or standards of
Islamic deposit insurance have been published. IFSB along with the Islamic Deposit Insurance
Group of International Association of Deposit Insurers (IADI) can work together to develop a
framework for deposit insurance of the Islamic banking sector. Similarly, no international body
has developed any framework for enhancing financial literacy related issues of Islamic finance.
Being an association of Islamic financial institutions, CIBAFI can take the initiatives to develop