From Iran, where all banking is Shari'ah compliant, to Malaysia and the gulf, where Islamic financial institutions compete with conventional banks, Rodney Wilson examines how Islamic financial institutions are licensed and governed by common and civil law. Covering Islamic banks, takaful operators, fund management and Shari'ah-compliant securities, it examines how their assets and liabilities differ from their conventional counterparts and what the implications are for risk management.

"Islamic Finance: The Regulatory Challenge…is therefore timely and a truly welcome addition to the growing literature on this subject…I congratulate the two professors for their fine contribution to the evolving art and science of the regulation of Islamic finance." —Dr. Zeti Akhtar Aziz, Governor, Bank Negara Malaysia "The World's financial regulators have taken too long to appreciate the importance of adapting their regulatory frameworks to the needs of the fast growing Islamic finance sector. Simon Archer and Rifaat Ahmed, the leaders in the field, have put together a fascinating collection of essays which show just what has to be done. It is a very timely book indeed." —Howard Davies, Director, London School of Economics "The emergence of Islamic finance as a major force in the world financial system has focused attention on regulatory issues. This book, edited by Professor Archer and Professor Rifaat, two of the most respected figures in the field, is an important point of reference for those who have to deal with these issues, whether in regulatory authorities, or in the financial institutions themselves." —Professor William Blair QC, Grays Inn, London "There is now great interest, both in financial and legal circles, in reliable and authoritative texts on Islamic finance. I have no doubt that the availability of Islamic Finance: The Regulatory Challenge will be warmly welcomed by those who provide financial and legal services. The work will be of great assistance to them." —The Rt Hon the Lord Woolf of Barnes, Law Lord and former Lord Chief Justice of England & Wales

"Islamic Finance: The Regulatory Challenge…is therefore timely and a truly welcome addition to the growing literature on this subject…I congratulate the two professors for their fine contribution to the evolving art and science of the regulation of Islamic finance." —Dr. Zeti Akhtar Aziz, Governor, Bank Negara Malaysia "The World's financial regulators have taken too long to appreciate the importance of adapting their regulatory frameworks to the needs of the fast growing Islamic finance sector. Simon Archer and Rifaat Ahmed, the leaders in the field, have put together a fascinating collection of essays which show just what has to be done. It is a very timely book indeed." —Howard Davies, Director, London School of Economics "The emergence of Islamic finance as a major force in the world financial system has focused attention on regulatory issues. This book, edited by Professor Archer and Professor Rifaat, two of the most respected figures in the field, is an important point of reference for those who have to deal with these issues, whether in regulatory authorities, or in the financial institutions themselves." —Professor William Blair QC, Grays Inn, London "There is now great interest, both in financial and legal circles, in reliable and authoritative texts on Islamic finance. I have no doubt that the availability of Islamic Finance: The Regulatory Challenge will be warmly welcomed by those who provide financial and legal services. The work will be of great assistance to them." —The Rt Hon the Lord Woolf of Barnes, Law Lord and former Lord Chief Justice of England & Wales

A practical guide for robust sharī'ah governance ofthe Islamic banking industry Debate in the market on the extent of sharī'ahcompliance of Islamic banks, their products, and activities haspiqued stakeholders' interest. In Foundations of Sharī'ahGovernance of Islamic Banks, Karim Ginena and Azhar Hamidexplore the depths of sharī'ah governance to unravelits mysterious dimensions, and equip academics and practitionerswith a solid understanding of the subject, which has become aserious challenge and thus deserves dedicated attention. The authors make a strong case for the need to contain thesharī'ah risk that Islamic banks experience, andpresent a compelling argument for how this should be done. Ginenaand Hamid propose a robust sharī'ah governance modelthat comprehensively tackles thisrisk, and helps improve the extentof sharī'ah compliance of market players. The authorsdetail the internal, external, and institutional arrangementsneeded to promote responsible sharī'ah governance, andcritically analyze current laws, regulations, and industrypractices on the topic. The chapters of the book do thefollowing: Examine the roots, characteristics and objectives ofsharī'ah and its relation to financial dealings; Probe the role of regulators in sharī'ahgovernance, explore the different approaches adopted by bankingsupervisors, and provide examples of relevant legal and regulatorymeasures; Explain to bank directors and management the fiduciary dutythey assume with respect to sharī'ah compliance, anddetail how they could discharge this responsibility in line withbest practices; Elaborate on the purpose of the Sharī'ahSupervisory Board (SSB), its responsibilities, competence criteria,internal regulations, and key governance guidelines; additionally,they explore different SSB models; Describe the internal sharī'ah control systemincluding its six components, and examine the internalsharī'ah audit function as well as different stages ofconducting a sharī'ah audit; Clarify the role of a sharī'ah auditor, withguidance on reporting lines, scope of duties, authority, andpractical ways on fulfilling tasks, such as a samplesharī'ah risk assessment grid and auditchecklists; Discuss the newly emerging external sharī'ahadvisory firms that are expected to play a key role in the comingyears and the services they provide. Through an effective treatment of each of these elements, andthe way that they interact with one another, the book offers afresh take on how robust sharī'ah governance of Islamicbanks can be successfully accomplished. It is a comprehensiveresource for academics, regulators, directors, lawyers, auditors,consultants, employees, and customers of Islamic banks interestedin learning more about these challenges. This essential readingpersuasively extends the discourse on the subject and addressescritical sharī'ah issues that have policy implicationsfor decision makers in jurisdictions aiming to attract thefast-growing Islamic finance industry or increase their marketshare.

From the world's foremost authorities on the subject, the number-one guide to Islamic finance revised and updated for a post-crisis world Because it is entirely equity-based, rather than credit-based, Islamic finance is immune to the speculative bubbles and runaway volatility typical of Western finance. Especially now, in the wake of the global financial crisis, this has made them increasingly attractive to institutional investors, asset managers and hedge funds in search of more stable alternatives to conventional financial products. With interest in Islamic finance swiftly spreading beyond the Muslim world, the need among finance and investment professionals has never been greater for timely and authoritative information about the rules governing Islamic finance. This thoroughly updated and revised second edition of the premier guide to regulatory issues in Islamic finance satisfies that need. Addresses the need for banks to develop common Islamic-based international accounting and auditing standards Clearly explains the key differences between Shari'ah rulings, standardization of acceptable banking practices, and the development of standardized financial products Explores the role of the Shari'ah Boards in establishing common rules regarding the permissibility of financial instruments and markets Offers guidance for regulators seeking to adapt their regulatory frameworks to the needs of the fast-growing Islamic finance sector

An in-depth and insightful study of Shari'ah governance from a theoretical and practical perspective. Shari'ah governance has a profound influence on the day-to-day practice of Islamic Financial Institutions (IFIs) and each jurisdiction has adopted a different approach to developing a governance framework. Hasan Zulkifli reviews these pluralistic approaches and identifies best practice. With examples, case studies and practical discussions based on IFIs in Malaysia, the GCC countries of Bahrain, UAE, Qatar, Kuwait and Saudi Arabia and the UK. Topics covered include; The theory behind corporate and Shari'ah governance; The regulatory framework for Shari'ah governance; Shari'ah governance approaches; The Shari'ah Board's role and how it retains its independence, transparency and competence; The operational procedures of Shari'ah governance; The effectiveness of the Shari'ah Board and how it could be improved