CIBAFI support the Islamic Financial Services Industry (IFSI) through provision a platform to discuss emerging issues and represent the industry at major global financial events
The Council of Islamic Banking and Financial Institutions (CIBAFI) has praised the Accounting and Auditing organisation for Islamic Financial Institutions (AAOIFI) for giving the opportunity to the IFSI to comment on the exposure draft and provided collective feedback of its member institutions from over 33 jurisdictions, reported BNA.
CIBAFI and its members said they are concerned that it might be difficult to apply the exposure draft’s investor categories to hybrid or mixed Sukuk which include equity and debt contracts.
The revised exposure draft should address more clearly hybrid structures that represent convertible, exchangeable or perpetual Sukuk, which are structures that may mutate over time, CIBAFI added.
The exposure draft states that the investment categories are divided into: equity-type instruments; monetary debt-type instruments; non-monetary debt-type instruments; and other investment instruments, BNA reports.
Also, CIBAFI members noted that, although non-transferable Sukuk fall outside the scope of this exposure draft, there may be some Sukuk which are in principle tradable but which in practise represent syndicated financing, and might be better classified as ‘loans or receivables’ than investment instruments.
Moreover, CIBAFI members suggest rewording the definition of participatory structure in the exposure draft which refers among others to sharing losses.
This could be taken to exclude Mudarabah structures, where the losses fall exclusively on the Rabb ul Mal, although in other respects it would be right to treat these as participatory, BNA reports.