Islamic Finance Reaches New Level of Shari'ah Governance in U.S.

04/08/2015 11:06 AST

Azzad Asset Management today announced the successful completion of an independent, external Shari'ah audit and verification of its policies and procedures. Azzad is the first investment boutique in the United States to obtain such verification.

Conducted by the UK-based Islamic Finance Advisory and Assurance Services (IFAAS), a leading specialist in Islamic finance, the audit first evaluated Azzad's Ethical and Shari'ah Investment Guidelines, which follow criteria set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the standard-setting body for the Islamic finance industry.

IFAAS's AAOIFI-certified Shari'ah auditors also evaluated the effectiveness of Azzad's internal Shari'ah verification procedures and tested the company's 2014 transactions to assess their compliance with Shari'ah principles. They also examined how Azzad calculates purification and Zakah for clients.



Najib Al Aswad, IFAAS Senior Manager, said:

"The Islamic finance industry is heading towards higher degrees of Shari'ah governance with an increasing number of markets introducing independent external Shari'ah audit as a regulatory requirement. Azzad's management decided to implement this best practice on a voluntary basis to provide a further layer of assurance to Azzad's clients and its Shari'ah Advisory Board. We are pleased to see that Azzad is conducting its business with high standards in Shari'ah governance and transparency."



Azzad President and CEO Bashar Qasem said:

"We do not make the rules for halal investing, but we are careful to follow them. For this reason, it was important for us to have an outside authority audit our policies and procedures. IFAAS is a worldwide leader in this field, and we appreciate their diligence and rigorous authentication of our business practices. We hope that this audit will raise the bar for other Islamic financial institutions, both domestically and internationally, leading to greater standardization in the industry."

Azzad abides by its Seven Tenets of Halal Investing, which follow AAOIFI guidelines for best practices for Islamic financial services companies. The third tenet is "Due Diligence and Verification," which includes taking steps such as obtaining the IFAAS audit to ensure the correct application of authentic Islamic finance rules.

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