Islamic Financial Services Board adopts standard on supervision of Shari’ah governance and approves guidance note on takaful recovery and resolution

The Islamic Financial Services Board (IFSB) Council has adopted IFSB-31, a new standard on Guiding Principles for Effective Supervision of Shari’ah Governance, and approved the issuance of GN-10, a guidance note on Recovery and Resolution for Takaful Undertakings. The measures are intended to strengthen supervisory oversight of Shari’ah governance across Islamic finance and to support crisis preparedness frameworks for the takaful sector. IFSB-31 targets supervisors overseeing Islamic banks, takaful undertakings and Islamic capital market institutions, and is positioned as complementary to, not a replacement for, IFSB-10 on Shari’ah governance systems. It recognises differences in legal and institutional frameworks across jurisdictions and promotes proportionate implementation while aiming for consistent supervisory outcomes; it is intended for use by supervisors that license Islamic financial institutions or Islamic capital market products under their financial stability or market conduct mandates. GN-10 is designed to help regulatory and supervisory authorities develop takaful-specific recovery and resolution frameworks, including guidance on applying the IFSB Takaful Core Principles, particularly TCP-12 and TCP-16, and it aligns with broader international frameworks such as the Financial Stability Board’s Key Attributes and relevant International Association of Insurance Supervisors guidance. The standard and guidance note will be available for download from the IFSB website.