1. 8.1 ISSC undertakes Shari'ah supervision of all businesses, activities, products, services, contracts, documents, and code of conducts of the IFI.
   ISSC issues Shari'ah fatwas and resolutions that are binding upon IFI. The members of ISSC are accountable for the resolutions and fatwas they issue to the IFI, and their compliance with the resolutions and standards issued by the HSA.
    
2. 8.2 ISSC must monitor, through internal Shari'ah control division or section and internal Shari'ah audit, the IFI's compliance with Islamic Shari'ah.
    
3. 8.3 In case a Shari'ah non-compliance issue is identified in an IFI, the ISSC must review and approve:
   1. corrective measures, if the correction is feasible,
   2. remediation required by the Islamic Shari'ah regarding the consequences arising from the Shari'ah non-compliance issue if the correction is not feasible,
   3. preventive measures to avoid reoccurrence of such issues.
   
    
4. 8.4 ISSC shall review and approve from Shari'ah perspective:
   1. the method for calculation and distribution of profits, and for allocation of expenditures and costs and their division between holders of investment accounts and shareholders.
   2. final annual accounts before presenting them to the Central Bank.
   
    
5. 8.5 In case where an IFI is a branch or subsidiary of an offshore bank, the ISSC of such IFI should approve all business operations, products, services investments, and financial securities that IFI executes, issues, manages, promotes, offers to its customers, or participates in. The approvals from offshore Shari'ah committees (or similar committees) in relation to the above should not be used as a substitute for the onshore ISSC approval.
    
6. 8.6 The ISSC must issue an annual report stating the extent of IFI's compliance with Islamic Shari'ah that is published within the financial statement in the IFI's disclosures and other available means.
    
7. 8.7 The annual Shari'ah report of ISSC must contain the main components specified by the HSA in the annual Shari'ah report form.
    
8. 8.8 The annual Shari'ah report should be submitted to the HSA for review and approval prior to presenting the same to the general assembly.

Performance Assessment of ISSC

1. 8.9 The IFI in coordination with the chairman of the ISSC should develop an assessment for ISSC based on the following aspects:
    

   First: Shari'ah and scholarly aspects in terms of the member's participation in decision making, discussions, and review of contracts, documents and reports submitted to ISSC. This should account for 70% of the assessment.

   Second: Organizational aspect in terms of members' attendance of meetings and adherence to meeting schedule (dates and times), and other procedures prescribed by ISSC charter, in line with this standard. This should account for 30% of the assessment.

   The IFI should inform each ISSC member upon appointment and at the beginning of each fiscal year about the assessment criteria.

2. 8.10 At the end of a fiscal year, the Chairman of the ISSC shall provide HSA with a report on performance assessment.

ISSC Charter

1. 8.11 IFI must adopt a charter for the ISSC that defines details of decision making process and their implementation, and setting of adequate methods to fulfil ISSC's responsibilities without prejudice to the requirements of this standard, and in accordance to the format approved by the HSA.

ISSC Independence

1. 8.12 The following controls and guidelines, as a minimum, must be observed to ensure the independence of ISSC members:
    
   1. Members of the ISSC must not have a first-degree relative as member of IFI's Board or executive body in the IFI.
       
   2. Should not be an owner/shareholder of/in a company that provides consultancy or Shari'ah services to the IFI where he acts as member of ISSC.
       
   3. Members of the ISSC should not be employees at the IFI or any of its affiliates when serving as members of the committee and should not provide services to the IFI outside the scope of ISSC's assigned functions.
       
   4. Members of the ISSC shall not accept any allowance from IFI or its affiliates other than the allowance they receive for being members of the ISSC, the allowance for attending ISSC meetings, and other matters related thereto. If a financing is granted to a member of the ISSC, such member should be treated as ordinary customers and should not receive any preferential treatment,
       
   5. Member of ISSC or his first or second-degree relatives, shall not own a share equal to/or more than 5% that entitles him to act as executives or managers in any commercial company to which the IFI has paid, or received from, payments of material size, or one of its subsidiaries during the current or previous fiscal year.
       
   6. The entitlement to ISSC allowances should not be conditional on achieving certain results, or linking it to the results of the services provided by the ISSC (conditional remuneration).
       
   7. The foregoing cases are examples of ISSC members' independence. In case the IFI desires to treat ISSC members independent despite the existence of one or more of the above relationships, it must transparently disclose those instances and bear the responsibility for clarifying the reason for considering such members independent.
       
   8. In case of inevitable conflict of interest, member of the ISSC must notify the IFI management thereof in writing. He must also disclose any conflict of interest cases related to his family members or business partners or companies he has interest in. Also in cases where conflict of interest is related to a third party, he has to refrain from participating in the decision. In case of reporting conflict of interests, this must be recorded.
       
   9. The IFI must immediately notify the central bank if it become aware of any material information that may negatively affect the independence of any ISSC member.

Confidentiality

1. 8.13 Member of the ISSC must not disclose Confidential Information of the IFI unless such disclosure is required by law or by the Central Bank.

Consistency

1. 8.14 The ISSC members should try to achieve agreement related to fatwas and resolutions, to the extent possible. ISSC shall not resort to majority vote unless members are unable to reach agreement within a reasonable period.