By Bernardo Vizcaino, Reuters
Oct 30 (Reuters) – Some of the world’s most well-known Islamic scholars are launching a self-regulating professional association that will develop training and professional conduct standards for the gatekeepers of Islamic finance.
The Association of Sharia Scholars in Islamic Finance (ASSIF), a British-registered charity, will address a longstanding problem in the industry: the lack of a clear, commonly recognized set of qualifications for scholars.
Boards of sharia scholars at financial institutions rule on whether activities and products follow religious principles such as bans on interest payments and monetary speculation.
But scholars’ rulings can contradict each other, confusing investors, and the approval process is open to accusations of conflicts of interest, since scholars are paid by the institutions whose products they vet.
The new association aims to work with the industry’s existing bodies around the globe rather than replace them, Mufti Abdul Kadir Barkatullah, ASSIF’s deputy president, said on the sidelines of the World Islamic Economic Forum in London.
“ASSIF will help to organize advisory providers by a verifiable unified standard of sharia guidance.”
The association could thus promote greater uniformity and consistency among sharia boards’ rulings and in standard-setting for the industry.
“We expect professional code of conduct and continuous professional development (standards) to be issued by mid- February 2014,” Barkatullah said.
Currently, standards set by industry bodies such as the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions are enforced in full or in part by some countries but not all of them.
Furthermore, the standards focus on the intricacies of Islamic financial instruments and their accounting treatment, rather than scholars’ qualifications or their professional conduct.
“ASSIF will raise professional standards and assist towards excellence along with other industry standards such as lawyers and accountants,” said Barkatullah.
The association’s work may complement efforts by organizations such as the Malaysian-based Association of Sharia Advisers in Islamic Finance (ASAS), set up in 2011, which has similar objectives but only a local mandate.
ASSIF will have a governing council of between 10 and 30 scholars, and already counts prominent scholars from the Arab world, Malaysia and Britain as trustees and co-founders.
These include Bahrain’s Sheikh Nizam Yaquby, Syria’s Abdul Sattar Abu Ghuddah, Saudi Arabia’s Mohamed Ali Elgari, and Malaysia’s Mohamad Akram Laldin. Together they share close to 270 seats in sharia boards around the world.