• IBANK Chapter 2 IBANK Chapter 2 Prudential Reporting Requirements

    • IBANK 2.1.1 Introduction

      (1) This Chapter sets out the prudential reporting requirements for an Islamic banking business firm.
      (2) Prudential returns of an Islamic banking business firm must reflect the firm's management accounts, financial statements and ancillary reports. A firm's returns, accounts, statements and reports must all be prepared using the same standards and practices, and must be easily reconcilable with one another.
      (3) A return is referred to as a solo return if it reflects 1 firm's accounts, statements and reports.
      (4) A consolidated return deals with the accounts, statements and reports of a firm consolidated with those of the other members of its financial group.

      Note Financial group is defined in rule 9.1.2(2) and is used for consolidated reporting instead of 'corporate group'.
      Derived from QFCRA RM/2015-2 (as from 1st January 2016).

    • IBANK 2.1.2 Information About Financial Group

      If directed by the Regulatory Authority, an Islamic banking business firm must give the authority the following information about its financial group:

      (a) details about the entities in the group;
      (b) the structure of the group;
      (c) how the group is managed;
      (d) any other information that the authority requires.
      Derived from QFCRA RM/2015-2 (as from 1st January 2016).

    • IBANK 2.1.3 Financial Group and Risks

      (1) If an Islamic banking business firm is part of a financial group, credit risk, market risk, operational risk, liquidity risk, equity participation risk and ROR risk apply on a consolidated basis to the firm and the other members that make up the financial group.
      (2) Done on a consolidated basis means done not just to include the financial activities or items of the firm but those of the other members of its financial group as well.

      Note An Islamic banking business firm must have systems to enable it to calculate its financial group capital requirement and resources — see rule 9.1.3(3). The firm must ensure that its financial group capital resources exceed its financial group capital requirement — see rule 9.2.2.
      Derived from QFCRA RM/2015-2 (as from 1st January 2016).

    • IBANK 2.1.4 Preparing Returns

      (1) An Islamic banking business firm must prepare the prudential returns that it is required to prepare by notice published by the Regulatory Authority on an approved website. Such a notice may also require Islamic banking business firms to give other information to the authority.
      (2) The firm must give the return to the Regulatory Authority within the period stated in the notice.
      (3) The Regulatory Authority may, by written notice:
      (a) require a firm to prepare additional prudential returns;
      (b) exempt a firm from a requirement to prepare annual, biannual, quarterly or monthly returns (or a particular return); or
      (c) extend the period within which to give a return.
      (4) An exemption may be subject to 1 or more conditions. The firm must comply with any condition attached to an exemption.
      (5) The firm must prepare and give prudential returns in accordance with the Regulatory Authority's instructions. The instructions may require that the return be prepared or given through the authority's electronic submission system.
      (6) The instructions may be set out in these rules, in the return itself, in a separate document published by the authority on an approved website or by written notice. These instructions, wherever or however they are given, are collectively referred to as instructions for preparing returns.

      Note Instructions may be in the form of formulae or blank spaces that the firm must use or fill in and that automatically compute the amounts to be reported.
      Derived from QFCRA RM/2015-2 (as from 1st January 2016).

    • IBANK 2.1.5 Giving Information

      (1) The Regulatory Authority may, by written notice, require an Islamic banking business firm to give to the authority information additional to that required under these rules.
      (2) An Islamic banking business firm must give information to the Regulatory Authority in accordance with the authority's instructions and within the period stated in the notice. The authority may extend the period within which to give the information.
      (3) The Regulatory Authority may exempt an Islamic banking business firm from giving information. The firm must comply with any condition attached to an exemption.
      Derived from QFCRA RM/2015-2 (as from 1st January 2016).

    • IBANK 2.1.6 Accounts and Statements to use International Standards

      (1) An Islamic banking business firm must prepare and keep its financial accounts and statements in accordance with the accounting standards of AAOIFI or any other accounting standards approved in writing by the Regulatory Authority.
      (2) If the firm decides to prepare and keep its financial accounts and statements in accordance with a standard other than the one it has previously used, it must notify the authority in writing before beginning to do so.
      Amended by QFCRA RM 2019-1 (as from 28th March 2019).

    • IBANK 2.1.7 Signing Returns

      (1) A prudential return must be signed by 2 individuals.
      (2) If the individuals approved to exercise the finance function and the senior executive function for the firm are available, they must sign the return. If either or both of those individuals is or are unable to sign, the return must be signed by 1 or 2 of the individuals approved to exercise the following functions:
      (a) the risk management function;
      (b) the compliance oversight function;
      (c) the executive governance function.

      Note The different functions mentioned are defined in the glossary as having the same meanings as in CTRL.
      Derived from QFCRA RM/2015-2 (as from 1st January 2016).

    • IBANK 2.1.8 Firm to Notify Authority

      (1) An Islamic banking business firm must notify the Regulatory Authority if it becomes aware, or has reasonable grounds to believe, that the firm has breached, or is about to breach, a prudential requirement.
      (2) In particular, the firm must notify the authority as soon as practicable of:
      (a) any breach (or foreseen breach) of its minimum capital requirement;
      (b) any concern (including because of projected losses) it has about its capital adequacy;
      (c) any indication of significant adverse change in the market pricing of, or trading in, the capital instruments of the firm or its financial group (including pressure on the firm to purchase its own equity or debt);
      (d) any other significant adverse change in its capital; and
      (e) any significant departure from its ICAAP.

      Note For an Islamic banking business firm's ICAAP, see rule 3.1.5.
      (3) The firm must also notify the authority of any measures taken or planned to deal with any breach, prospective breach or concern.
      Derived from QFCRA RM/2015-2 (as from 1st January 2016).