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  • HC-9.1 Governance and Disclosure per Shari’a Principles

    • HC-9.1.1

      Companies which refer to themselves as “Islamic” must follow the principles of Islamic Shari’a.

      Added: July 2023

    • HC-9.1.2

      Category 1 and Category 2 investment firm licensees, which are guided by the principles of Islamic Shari’a have additional responsibilities to their stakeholders. Investment firm licensees which refer to themselves as “Islamic” are subject to additional governance requirements and disclosures to provide assurance to stakeholders that they are following Shari’a Principles. In ensuring compliance with Shari’a principles, such licensees must establish a Shari’a Supervisory Board consisting of at least three Shari’a board members. Category 3 investment firm licensees, which are guided by the principles of Islamic Shari'a and refer to themselves as “Islamic” must appoint a minimum of one Shari’a advisor or scholar to verify that their operations are Shari’a compliant.

      Added: July 2023

    • HC-9.1.3

      In addition to its duties outlined in Section HC-3.4, the Audit Committee shall communicate and co-ordinate with the investment firm licensee’s Corporate Governance Committee and the Shari’a Supervisory Board (“SSB”) (where applicable) to ensure that information on compliance with Islamic Shari’a rules and principles is reported in a timely manner.

      Added: July 2023

    • HC-9.1.4

      The Board shall set up a Corporate Governance Committee (see also Paragraph HC-3.7.2). In this case, the Committee shall comprise at least three members to co-ordinate and integrate the implementation of the governance policy framework.

      Added: July 2023

    • HC-9.1.5

      The Corporate Governance Committee established under Chapter HC-9 shall comprise at a minimum of:

      (a) An independent director to chair the Corporate Governance Committee. The Chairman of the Corporate Governance Committee should not only possess the relevant skills, such as the ability to read and understand financial statements, but should also be able to coordinate and link the complementary roles and functions of the Corporate Governance Committee and the Audit Committee;
      (b) A Shari’a scholar who is an SSB member for the purpose of leading the Corporate Governance Committee on Shari’a-related governance issues (if any), and also to coordinate and link the complementary roles and functions of the Corporate Governance Committee and the SSB; and
      (c) An independent director who can offer different skills to the committee, such as legal expertise and business proficiency, which are considered particularly relevant by the Board of directors for cultivating a good corporate governance culture, and deemed “fit and proper” by the CBB.
      Added: July 2023

    • HC-9.1.6

      The Corporate Governance Committee shall be empowered to:

      (a) Oversee and monitor the implementation of the governance policy framework by working together with the management, the Audit Committee and the SSB; and
      (b) Provide the Board of directors with reports and recommendations based on its findings in the exercise of its functions.
      Added: July 2023