Wakalah - Overview

Transcription

1. Wakalah PART A 1 of 20 OVERVIEW 1 . Introduction 1.1 Compliance with Shariah requirement is a prerequisite in ensuring the legitimacy and integrity of Islamic financial products and services. In meeting this expectation, it is essential for an Islamic financial institution (IFI) to establish the necessary operational framework and infrastructure to ensure that the conduct of Islamic financial transactions is consistent with Shariah. 1.2 The Shariah contract-based regulatory policy is intended to promote consistency of Shariah contract application in Islamic financial products and services. This policy document is envisaged to strengthen legal certainty and Shariah compliance practices by an IFI. 1.3 The objectives of this policy document are to – (a) provide reference on the applicable Shariah rulings for binding wakalah contract; (b) set out key operational requirements for the implementation of binding wakalah; and (c) promote end-to-end compliance with Shariah requirements which further promote sound banking practices and safeguard consumer interests. 1.4 This policy document sets out the following: (a) salient features and essential conditions of wakalah in Part B; and (b) regulatory and supervisory expectations for the operational requirements on governance and oversight, structuring, risk management, business and market conduct as well as financial disclosure in Part C. 1.5 This policy document covers the application of wakalah contract in financial products and services offered by an IFI. 2. Applicability 2.1 This policy document is applicable to an IFI as defined in paragraph 5.2. 2.2 For the avoidance of doubt, where an IFI adopts wakalah bi al-istithmar for the purpose of investment account – (a) the operational requirements in Part C of this policy document are not applicable; and (b) the operational requirements as provided in the policy document on Investment Account issued by the Bank are applicable. 3. Legal provision 3.1 The requirements in Part B of this policy document are specified pursuant to: (a) section 29(1) of the Islamic Financial Services Act 2013 (IFSA); and (b) section 33E of the Development Financial Institutions Act 2002 (DFIA). Issued on: 24 June 2016
2. Wakalah 2 of 20 3 .2 The requirements in Part C of this policy document are specified pursuant to: (a) sections 29(2), 57(1), 135(1) and 155 of the IFSA; and (b) sections 33E(2), 41, 42C(1) and 116 of the DFIA. 3.3 The guidance in this policy document is issued pursuant to section 277 of the IFSA and section 126 of the DFIA. 4. Effective date 4.1 This policy document comes into effect on 1 July 2018, except for paragraph 28 which shall come or take effect immediately upon issuance of this policy document. 5. Interpretation 5.1 The terms and expressions used in this policy document shall have the same meanings as assigned under the IFSA, Financial Services Act 2013 (FSA), and DFIA, as the case may be, unless otherwise defined in this policy document. 5.2 For the purpose of this policy document: “S” denotes a standard, an obligation, a requirement, specification, direction, condition and any interpretive, supplemental and transitional provisions that must be complied with. Non-compliance may result in enforcement action; “G” denotes guidance which consist of such statements or information intended to promote common understanding and advice or recommendations that are encouraged to be adopted; “Islamic financial institution” or “IFI” means: (a) a licensed Islamic bank; (b) a licensed takaful operator and professional retakaful operator; (c) a licensed bank or licensed investment bank approved under section 15(1)(a) FSA to carry on Islamic banking business; and (d) a prescribed institution under the DFIA approved under section 33B DFIA to carry on Islamic financial business. 5.3 A glossary of terms used in this policy document is set out in Appendix 2. Issued on: 24 June 2016
3. Wakalah 3 of 20 6 . Related Shariah rulings and policy documents 6.1 This policy document must be read together with other relevant legal instruments, policy documents or guidelines that have been issued by the Bank, in particular; (a) Investment Account; (b) Guidelines on Corporate Governance for Licensed Islamic Bank; (c) Guidelines on Corporate Governance for Development Financial Institution; and (d) Shariah Governance Framework. Issued on: 24 June 2016