Helpful Hints

• Investors should only consider Islamic investment products that are governed by an internationally acceptable Shariah capital markets framework to protect their interests and ensure that cases are admissible in court.
• The Shariah advisory board can issue fatwas regarding the permissibility of investment instruments and then verify the compliance with the issued fatwas. The board also issues reports certifying the conformity of investment transactions in accordance to the Shariah principles.
• Shariah advisory boards for internationally distributed investment products are now made up of scholars from different jurisdictions who will seek harmonization to ensure Shariah convergence and acceptability across different markets, even if the wording of the Shariah interpretation is not the same in the two markets.
• The Islamic Financial Services Board (IFSB) is an international organization that aims to increase the international acceptability of Islamic cross-border transactions. It promotes and enhances the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry, broadly defined to include banking, capital markets, and Takaful sectors.
• To internationally standardize its accounting, auditing, governance, ethics, and Shariah compliance for Islamic financial institutions, the Accounting & Auditing Organization of Islamic Financial Institutions (AAOIFI) was formed. AAOIFI is an independent international organization whose standards have now been adopted and recognized by many countries.
• The Malaysia model offers a comprehensive legal and regulatory framework supported by a Shariah Advisory Council at the national level. This enables the admission of cases involving Islamic investment products into civil court, which importantly makes the judicial decision enforceable.