The IFSB issues Exposure Draft of the Guiding Principles on Investor Protection in Islamic Capital Markets (ED- 24) for public consultation

24 March 2020, Kuala Lumpur - The Islamic Financial Services Board (IFSB) has today issued the Exposure Draft of a Standard on Guiding Principles for Investor Protection in Islamic Capital Markets (ED-24) for Public Consultation for a period of sixty days, starting from 24 March 2020 until 24 May 2020. The IFSB invites comments from regulatory and supervisory authorities, international organisations, institutions offering Islamic financial services (IIFS), academics and other interested parties.

The development of a standard on investor protection in Islamic capital markets (ICM) recognises the crucial role that investor protection plays in the development and integrity of capital markets. Investor confidence and trust in a well-functioning ICM is essential in promoting financial stability, growth, efficiency and innovation over the long term. The standard therefore aims to set out minimum requirements to be applied in the ICM for the protection of investors and the promotion of financial stability. The main objectives of the standard are:

(i)    to address the Islamic finance-specific issues that need to be considered within regulatory frameworks for investor protection;
(ii)   to define best practices for investor protection in relation to the ICM;
(iii)   to support the development of robust investor protection frameworks for the ICM; and
(iv)  to increase harmonisation of regulatory practice, to support the development of the international ICM.