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Questions and Answers
What is the main purpose of establishing an Internal Syariah Audit Framework (ISAF) within financial institutions?
What is the main purpose of establishing an Internal Syariah Audit Framework (ISAF) within financial institutions?
- To facilitate effective implementation of internal Syariah audit (correct)
- To ensure compliance with international banking regulations
- To support financial institutions in restructuring debts
- To enhance profitability of the institutions
What basis are financial institutions encouraged to adopt recommendations regarding the Internal Syariah Audit Framework (ISAF)?
What basis are financial institutions encouraged to adopt recommendations regarding the Internal Syariah Audit Framework (ISAF)?
- Voluntary guidelines only
- Comply or explain basis (correct)
- Mandatory adherence without exception
- Strictly enforced supervision basis
Which of the following is NOT an objective of the Internal Syariah Audit Framework (ISAF)?
Which of the following is NOT an objective of the Internal Syariah Audit Framework (ISAF)?
- Setting expectations from the Authority on financial institutions
- Reducing operational costs of financial institutions (correct)
- Providing guidance on Internal Syariah audit governance
- Specifying the scope of internal Syariah audits
Within how many months must financial institutions establish an Internal Syariah Audit Framework (ISAF) following the issuance of the notice?
Within how many months must financial institutions establish an Internal Syariah Audit Framework (ISAF) following the issuance of the notice?
Which of the following components is NOT mentioned as part of the ISAF guidance for financial institutions?
Which of the following components is NOT mentioned as part of the ISAF guidance for financial institutions?
What is the primary responsibility of the internal auditor concerning Syariah compliance?
What is the primary responsibility of the internal auditor concerning Syariah compliance?
Which standards must the ICM Participant comply with when preparing and maintaining financial accounts?
Which standards must the ICM Participant comply with when preparing and maintaining financial accounts?
What approvals are necessary for charges and fees imposed by the ICM Participant?
What approvals are necessary for charges and fees imposed by the ICM Participant?
Which of the following securities is allowed for the ICM Participant to deal with?
Which of the following securities is allowed for the ICM Participant to deal with?
What is required for managing the banking accounts of the ICM Participant?
What is required for managing the banking accounts of the ICM Participant?
What is the main aim of the internal policies regarding advertisements for the ICM Participant?
What is the main aim of the internal policies regarding advertisements for the ICM Participant?
What should the ICM Participant's written declaration include?
What should the ICM Participant's written declaration include?
What additional requirement exists for distributing foreign Islamic securities in Brunei?
What additional requirement exists for distributing foreign Islamic securities in Brunei?
What immediate action is expected from the SAB and BOD regarding reported non-compliance?
What immediate action is expected from the SAB and BOD regarding reported non-compliance?
In terms of daily operations, what must the ICM Participant ensure to comply with Hukum Syara’?
In terms of daily operations, what must the ICM Participant ensure to comply with Hukum Syara’?
What does the disclaimer from the Brunei Darussalam Central Bank indicate about the responsibility for actions taken based on the study manual?
What does the disclaimer from the Brunei Darussalam Central Bank indicate about the responsibility for actions taken based on the study manual?
Which organization is responsible for setting standards applicable to Islamic financial institutions?
Which organization is responsible for setting standards applicable to Islamic financial institutions?
What could be the role of a Special Purpose Vehicle (SPV) in Islamic investment business?
What could be the role of a Special Purpose Vehicle (SPV) in Islamic investment business?
Which framework must be implemented to ensure compliance with Islamic law in financial products?
Which framework must be implemented to ensure compliance with Islamic law in financial products?
What does the term 'Over the Counter (OTC)' imply in the context of Islamic investment business?
What does the term 'Over the Counter (OTC)' imply in the context of Islamic investment business?
Which of the following best describes a Collective Investment Scheme (CIS) in the context of Islamic finance?
Which of the following best describes a Collective Investment Scheme (CIS) in the context of Islamic finance?
What is the main purpose of the internal Syariah audit framework (ISAF) in Islamic investment businesses?
What is the main purpose of the internal Syariah audit framework (ISAF) in Islamic investment businesses?
Which license is essential for conducting Capital Markets Services in the context of Islamic finance?
Which license is essential for conducting Capital Markets Services in the context of Islamic finance?
What must an ICM Participant ensure regarding the handling of clients' funds?
What must an ICM Participant ensure regarding the handling of clients' funds?
What is required when outsourcing critical operational functions?
What is required when outsourcing critical operational functions?
What does 'purification' refer to in the context of non-permissible revenue?
What does 'purification' refer to in the context of non-permissible revenue?
Why is it important for the system used by the ICM Participant to support clear separation of activities?
Why is it important for the system used by the ICM Participant to support clear separation of activities?
What should the internal policies on Zakah contributions be based on?
What should the internal policies on Zakah contributions be based on?
What must not be impaired by outsourcing important operational functions?
What must not be impaired by outsourcing important operational functions?
What is the role of the SAB in the context of purification policies?
What is the role of the SAB in the context of purification policies?
Which statement regarding the accrual of interest on bank accounts is true?
Which statement regarding the accrual of interest on bank accounts is true?
What must be ensured with respect to trading accounts in an Islamic window?
What must be ensured with respect to trading accounts in an Islamic window?
What should risk management arrangements for an ICM Participant address?
What should risk management arrangements for an ICM Participant address?
What is the prerequisite for a financial contribution to qualify as Zakah?
What is the prerequisite for a financial contribution to qualify as Zakah?
Which entity must approve the offering of Islamic financial products?
Which entity must approve the offering of Islamic financial products?
When must an application for an Islamic financial product be submitted?
When must an application for an Islamic financial product be submitted?
Which of the following circumstances does NOT require compliance with Appendix 1 requirements?
Which of the following circumstances does NOT require compliance with Appendix 1 requirements?
What is the maximum period within which the Authority must respond to a completed application?
What is the maximum period within which the Authority must respond to a completed application?
Which of the following scenarios would require adherence to Appendix 2 requirements?
Which of the following scenarios would require adherence to Appendix 2 requirements?
What is a duty of the SAB as mandated by the Guidelines on Syariah Governance Framework?
What is a duty of the SAB as mandated by the Guidelines on Syariah Governance Framework?
Which of the following is NOT true regarding the Guidelines on the Islamic Product Approval Process?
Which of the following is NOT true regarding the Guidelines on the Islamic Product Approval Process?
Which of the following factors does NOT influence the requirements for an Islamic product application?
Which of the following factors does NOT influence the requirements for an Islamic product application?
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Study Notes
Disclaimer
- BDCB is not responsible for any actions taken based on information in this manual
- They are not liable for any consequences of actions taken based on this manual
- BDCB does not provide legal or other expert advice
Applying to Conduct Islamic Investment Business
- ICM Participant is a term used to refer to an entity that is approved by BDCB to carry out Islamic investment business activities
- Any entity applying to carry out such activities must comply with the SMO, 2013, and the BDCBO, 2010
- Compliance with the Syariah Governance Framework (SGF) as outlined in BDCB Notice No.IFAU/N/1/2018 is required for all applications
Conducting Islamic Investment Business
- ICM Participants are required to ensure all business operations and activities comply with Hukum Syara’
Specific Requirements
- ICM Participants must comply with IFRS and AAOIFI standards when preparing financial accounts and statements
- Charges and fees imposed on transactions and services must be approved by the SAB and BOD
- This applies to dealings and arrangements of investments in Islamic securities
Approval of Islamic Financial Products
- Prior to offering financial services or products, ICM Participants must obtain approval from the Syariah Financial Supervisory Board (SFSB)
- The Notice on Application Process of Islamic Product sets out requirements for application of Islamic products
Implementing a Syariah Governance Framework
- All firms must establish an Internal Syariah Audit Framework (ISAF) within 6 months of the issuance of the notice
- All firms are encouraged to adopt ISAF recommendations on a “comply” or “explain” basis
- The objective of ISAF is to set expectations on firms to establish institutional arrangements and recommendations to facilitate the effective implementation of internal Syariah audit as an integral component of the SGF
- This includes specifying the scope of internal Syariah audit, internal Syariah audit objectives, internal Syariah audit governance, internal Syariah audit charter, competency of internal Syariah auditors, internal Syariah audit process and reporting for internal Syariah audit
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