A. Product Certification
The Board provides certification of financial products based on the following procedure.
1. Premise Document
Our clients send us a brief “premise document” describing the objectives, proposed contracts, methodology and economic impact of the services to be developed for initial review.
2. Preliminary Shariah Assessment Report (PSAR)
IFAB prepares a Preliminary Shariah Assessment Report (PSAR) that identifies Shariah issues, weaknesses and strengths using a traffic light system of the proposed product and methodology.
3. Client Revision
The clients take the appropriate actions making revisions and amendments to their proposal ensuring Shariah compliance through addressing the concerns raised in the PSAR.
4. Interim Shariah Report (ISR)
Once the document is revised by the client, it is discussed with the Board that scrutinizes it further to ensure that the product and its methodology is completely Shariah compliant. An Interim Shariah Report (ISR) is produced at this stage with comments from the advisors.
5. Legal Documentation
Once the Board gives a green light, the clients prepare legal documentation required for product development. After the legal documentation is completed, it is submitted to the Board for final approval.
The final stage involves approval of the completed product and its structure by the Board that issues a Legal Ruling (Fatwa) on the basis of the information provided by the client.
7. Final Product
The product is now ready to be introduced into the market with the necessary and complete documentation including the fatwa ensuring its compliance.
The Board undertakes the audit of Shariah-compliant service providers to ensure continued compliance over the life of the product. The audits are conducted by specialized professionals and Shariah scholars either on a periodic basis, or on a per request basis. The Board also partners with public accounting firms to provide audit of financial institutions under the guidelines issued by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).