Islamic Financial Services Board adopts a standard on supervising Shari’ah governance and approves takaful recovery and resolution guidance

The Islamic Financial Services Board (IFSB) Council adopted a new standard on effective supervision of Shari’ah governance and approved the issuance of a guidance note to support recovery and resolution preparedness for takaful undertakings. The new standard, IFSB-31, sets guiding principles for supervisory oversight of Shari’ah governance across Islamic banks, takaful undertakings, and Islamic capital market institutions. It does not replace IFSB-10 on Shari’ah governance systems, and is designed to accommodate differences in jurisdictions’ legal and institutional frameworks by promoting proportionate implementation and consistent supervisory outcomes. IFSB-31 is intended for all supervisors that license Islamic financial institutions or Islamic capital market products, and can be implemented under financial stability or market conduct mandates. The Council also approved GN-10 on Recovery and Resolution for Takaful Undertakings, which is intended to help authorities develop takaful-specific recovery and resolution frameworks, including by guiding application of the IFSB Takaful Core Principles, particularly TCP-12 and TCP-16, and aligning with broader frameworks such as the Financial Stability Board’s Key Attributes and relevant IAIS guidance. The IFSB indicated the documents will be made available for download on its website.