CIFE Sharia Governance and Compliance 2

Question 1

What is the AAOIFI Governance Standard on Sharia Supervisory Board composition?

Accepted Answer

Minimum three members with Islamic jurisprudence qualifications, independence requirements, and limitations on concurrent board memberships

Answer

No standard exists

Answer

One member is sufficient

Answer

Members must be employees of the institution

Question 2

What is the difference between binding and non-binding Sharia opinions?

Accepted Answer

SSB fatwas are binding on the institution that appointed the board, while general scholarly opinions are advisory

Answer

All Sharia opinions are non-binding

Answer

All Sharia opinions are binding globally

Answer

Only government-issued fatwas are binding

Question 3

What internal controls must Islamic financial institutions maintain for Sharia compliance?

Accepted Answer

Sharia compliance monitoring, transaction sampling, contract review processes, income purification tracking, and staff Sharia training programs

Answer

No special internal controls are needed

Answer

Only financial controls are needed

Answer

External auditors handle all controls

Question 4

How does the UAE Central Bank regulate Islamic banking operations?

Accepted Answer

Through the Higher Sharia Authority for standardization, prudential regulations adapted for Islamic banking, and liquidity management frameworks

Answer

No special regulation for Islamic banks

Answer

Only through conventional banking regulations

Answer

The SCA regulates Islamic banks

Question 5

What is the concept of Sharia harmonization in the UAE and GCC?

Accepted Answer

Efforts to standardize Sharia interpretations across institutions and jurisdictions to reduce inconsistencies and increase market confidence

Answer

All Islamic banks follow identical Sharia interpretations

Answer

Harmonization is not possible due to scholarly differences

Answer

Only AAOIFI standards apply everywhere

Question 6

What disclosure requirements apply to Islamic financial institutions regarding Sharia compliance?

Accepted Answer

Publish SSB reports, disclose Sharia non-compliance events, report income purification amounts, and provide transparency on product structures

Answer

No specific disclosure is required

Answer

Only financial disclosures apply

Answer

Disclosure is voluntary