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POLICY AND LEGISLATIVE COUNSEL
Policy and Legislative Counsel
Regulatory Policy Initiatives
The key focus of work for the Policy and Legislative Counsel department of the Regulatory Authority in 2015 was the upgraded prudential framework for Islamic banks. Other major policy work included changes
to strengthen the Conduct of Business Rulebook and the Qatar Renminbi Centre initiative.
Islamic Banking Business Prudential Rules (IBANK)
Following the changes made to the conventional banking prudential framework in 2014, the Regulatory Authority began a comprehensive review of
the Qatar Financial Centre
Islamic banking business prudential framework. The aims of the review were to create a prudential framework for Islamic banks which aligned with the latest international regulatory standards of the Islamic Financial Services Board (IFSB) and the Islamic banking framework of the Qatar Central Bank.
The IFSB standards are designed to complement the Basel Capital framework (Basel framework) and similarly focus on capital adequacy, capital quality and risk coverage. In addition, the IFSB standards address the specific asset-backed nature
of Islamic financial instruments, the risks that those instruments present to firms, their respective prudential treatment as well as guiding principles on Shari’a governance systems.
Following public consultation,
the new Islamic Banking Business Prudential Rules 2016 (IBANK) were approved and came
into force in January 2016. The IBANK Rules include a framework that sets out higher and better- quality capital requirements
as well as an increased focus
on the broader issues related
to prudential risk coverage
and Shari’a governance as prescribed under the IFSB framework. The introduction of the IBANK prudential rules will complement and support the ongoing work being undertaken by the Regulatory Authority on micro and macro supervision and its revised prudential reporting framework. The Regulatory Authority is working closely with the relevant Qatar Financial Centre firms on their transition into the new prudential regime.
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