Islamic finance has grown rapidly over the last 10 years, with both local and global law firms especially in the Persian Gulf region loudly trumpeting teams of expert advisers in the field.

Lack of transparency

But the sector has suffered from a lack to transparency. Products must obtain a seal of approval from boards of specialist scholars that assess whether the instruments adhere to strict religious principles. However, training and accreditation of those scholars is either non-existent or shrouded in mystery.
Now, according to a recent report from the news agency Reuters, the five-month-old Malaysian-based Association of Sharia Advisers in Islamic Finance is aiming to impose a global set of standards, including a code of ethics and a professional development programme, to ease wider international concerns about the process.

Ethics code

According to the report, the association is aiming this year to launch a test that will assess the financial literacy of Islamic scholars. It will also produce a code of ethics and openly reprimand its members who are in breach.
Speaking to the news agency, Kuala Lumpur-based association president Aznan Hasan, said his group wanted to address wider global concerns that some scholars ‘may be static in terms of their knowledge’. And he acknowledged that under the current system, ‘if we are not careful, someone who claims to be a scholar could give wrong advice’.