Article (4) Definitions

N 5785/2024 Effective from 29/11/2024

For the purposes of this Standard, the following words and phrases shall have the meanings stated below.

a.	Senior Management: The executive management of the IFI responsible and accountable to the Board for the sound and prudent day-to-day management of the IFI, generally including, but not limited to, the chief executive officer, chief financial officer, chief risk officer, and heads of the compliance and internal audit functions.
b.	Internal Shari’ah Control Division (or Section): A technical division (or section) in the IFI that supports the ISSC in its mandate.
c.	Compliance with Islamic Shari’ah Provisions: It refers to compliance with Islamic Shari’ah in according with:
	a.	The provisions stated in Section Six of Book Three of the Commercial Transactions Law,
	b.	The provisions contained in the bylaws issued implementing Section Six of Book Three of the Commercial Transactions Law,
	c.	The resolutions, Fatwas, regulations and standards issued or adopted by the Higher Shari’ah Authority in relation to businesses and activities of the IFI ("HSA’s Resolutions"),
	d.	The resolutions and Fatwas issued or approved by the Internal Shari’ah Supervision Committee of the respective IFI, in relation to businesses and activities of such IFI ("ISSC’s Resolutions"), provided that they do not contradict HSA’s Resolutions.
d.	External Shari’ah Audit: An independent process to inspect and assess the IFI’s compliance with Islamic Shari’ah Provisions, and the level of adequacy and effectiveness of its Shari’ah governance systems for the relevant fiscal year, conducted by an external party.
e.	Internal Shari’ah Audit: The regular process to inspect and assess the IFI’s compliance with Islamic Shari’ah Provisions and the level of adequacy and effectiveness of IFI’s Shari’ah governance systems conducted by the Internal Shari’ah Audit division or department.
f.	Commercial Transactions Law: Federal Decree Law No. (50) of 2022 regarding the Commercial Transactions Law.
g.	Internal Shari’ah Supervision Committee (“ISSC”): A body appointed by an IFI, comprised of scholars specialized in Islamic financial transactions, which independently supervises transactions, activities, and products of the IFI and ensure its compliance with Islamic Shari’ah Provisions in all its objectives, activities, operations, and code of conduct.
h.	Board: Islamic Financial Institution’s board of directors.
i.	Shari’ah Non-Compliance Risks: Probability of financial loss or reputational risk that IFI might incur for not complying with Islamic Shari’ah Provisions.
j.	External Shari’ah Auditor: The Shari’ah audit firm and the individual audit engagement team members conducting the audit. Where relevant, specific references are made to the external Shari’ah audit firm only in certain paragraphs.
k.	Central Bank: The Central Bank of the United Arab Emirates.
l.	Islamic Financial Institutions (“Institutions/IFIs”): The Central Bank licensed financial Institutions that conduct all or part of their activities and businesses in accordance with the provisions of Islamic Shari’ah.
m.	Higher Shari’ah Authority: The authority established in accordance with the Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organization of Financial Institutions and Activities, as amends. It exercises the mandates and responsibilities stipulated in the above mentioned decretal law.