AAOIFI Governance and Ethics Board (AGEB) in its 43rd meeting approves, in principle, the governance standard on “Governance and Management of Investment Accounts”

18 December 2025

The Accounting and Auditing Organization for Islamic Financial Institutions' (AAOIFI's) Governance and Ethics Board (AGEB / the board) discussed and approved in-principle the issuance of the AAOIFI Governance Standard (GS) 24 "Governance and Management of Investment Accounts" and the reissuance of the exposure draft (ED) of the GS _ "Development and Governance of Shari'ah-Compliant Benchmark Rates" at its 43^rd meeting, held on 10 December 2025, via video conferencing.

The GS 24 "Governance and Management of Investment Accounts" introduces a comprehensive governance framework for the management of investment accounts (IAs) and other participatory investment instruments. It complements AAOIFI's existing Shari'ah, governance and financial accounting standards. The standard's key objectives include enhancing Shari'ah compliance, safeguarding stakeholder interests and ensuring accurate profit and loss attribution in line with contractual and Shari'ah requirements. The board reviewed the industry stakeholders' comments received on the ED, made certain necessary amendments according to the justifiable public comments and instructed the secretariat to proceed with its issuance upon completion of the required due process.

In its deliberations on the ED of GS_ on "Development and Governance of Shari'ah-Compliant Benchmark Rates", the board reviewed the progress of the project, initially issued for public consultation in 2022. At the previous meeting, the appendix titled "Illustrative Model: Shari'ah-Compliant Benchmark Rate Based on Macro-Level Economic Indicators" was discussed. During the current meeting, the secretariat presented a second appendix titled "Illustrative Model: Shari'ah-Compliant Benchmark Rate Based on Islamic Financial Market Data", outlining the structure, key features, computation mechanism and workflow for deriving a Shari'ah-compliant benchmark rate. After reviewing both models, the board approved, in principle, the reissuance of the ED of GS _ "Development and Governance of Shari'ah-Compliant Benchmark Rates" for public consultation along with the two illustrative models. The board also decided that certain additional models, may be based on the micro economic variables, and certain research materials related to different models, shall be developed shortly in form of a guidance note.

Mr. Farrukh Raza, chairman of the AAOIFI Governance and Ethics Board (AGEB), stated: "I would like to extend my sincere appreciation to the board, the relevant working groups and the secretariat for their dedicated efforts and continued commitment". He added: "I believe that GS 24 "Governance and Management of Investment Accounts" is a much-needed standard that unifies governance and control requirements across jurisdictions, thereby contributing to the mitigation of reputation risk for the Islamic finance industry". He concluded: "I am confident that the reissuance of the ED of GS_ "Development and Governance of Shari'ah-Compliant Benchmark Rates", together with the relevant appendices, will lay the groundwork for the practical and large-scale application of Shari'ah compliant benchmark rates".

On this occasion, Mr. Omar Mustafa Ansari, Secretary General of AAOIFI, stated: "The governance standard on the management of investment accounts has undergone an extensive due process, including four public hearings and one roundtable in English, as well as, one public hearing in Arabic. This reflects our commitment to developing high-quality standards that incorporate industry insights and uphold the highest levels of Shari'ah compliance and governance". He further stated: "After completing the due process, we look forward to obtaining industry feedback on the ED of GS_ "Development and Governance of Shari'ah-Compliant Benchmark Rates". Details regarding the dates and venues of the public hearings will be announced on the AAOIFI website".