This week the spotlight is on regulatory developments in Bahrain, where the Kingdom’s Central Bank has published new Sharia Governance standards following extensive consultations with the industry and the Central Bank’s Centralised Sharia Supervisory Board.
The new standards will apply from 30 June 2018 and will affect all Islamic retail and wholesale banks in the Kingdom. Amongst other changes, for the first time an Independent External Sharia Compliance Audit will be mandatory. The first audit report will have to be issued in 2020 and will be based on the transactions, structures and activities of 2019. The new standards also clarify the roles and responsibilities of management and Boards of Directors in terms of Sharia compliance. The Sharia governance structure of an Islamic bank will have to have a Sharia Supervisory Board. The Board will need to have a Sharia Coordination and Implementation function, Internal Sharia Audit function and External Independent Sharia Compliance Audit.
Elsewhere, the country’s Labour Market Regulatory Authority has announced it is establishing a new business centre. The Distinguished Service Centre will provide employers with facilities at their workplace, without them having to visit the Authority’s headquarters or other branch. Employers will have to pay a fee to use the centre. A new special hall will also be opened at the Authority’s headquarters for businessmen, foreign investors, banks, local or international companies, or anyone else wishing to use its services. This will also incur an additional cost.