Our Shariah Assurance Process
We go to great lengths to assure that the product and services we offer to consumers and the investment products that we offer to institutional investors have been carefully constructed and tested to assure their compliance with Shariah law.
These five summaries describe the steps in our process:
Annual Shariah Review
Product Development
Investment Management
Purification
Supervision and Monitoring
Shariah Review
Guidance conducts regular Shariah Supervisory Board meetings to review existing operations and preview any potential Shariah aspects or complexities associated with new initiatives. By involving the Board early in the development of new products and initiatives we can identify major areas of focus to be addressed in the product development process.
back to top
Product Development
For new products, Guidance structures every facet to be Shariah-compliant. In many instances this involves creating new solutions or innovations to meet Shariah guidelines, adhere to local regulatory requirements and satisfy commercial objectives. Guidance seeks the constructive feedback of the Board, as needed, to refine the proposed structure, documentation or solution during the product development process prior to receiving final approval.
back to top
Investment Management
For investment funds, we ensure that every transaction is Shariah-compliant. Where Guidance is the Shariah advisor for third party fund sponsors, as well as for our internally managed funds, we review every facet of a proposed investment as early as possible during deal negotiations and during the drafting of term sheets. We will typically designate a sub-committee of the Shariah Supervisory Board for each fund to approve, or recommend amendments to, each transaction in the particular fund. Each transaction is approved by the relevant committee. This approach provides for efficiency and speed throughout the Shariah approval process and allows our investment managers to focus on the transaction without risk of delay due to the Shariah approval process.
back to top
Purification
It is often unavoidable that some income generated within the financial products and services managed or advised by Guidance includes a form of tainted income, such as interest. Such income is identified, in accordance with the guidelines of the Shariah Supervisory Board, segregated, and donated to charity.
back to top
Supervision and Monitoring
Guidance conducts periodic and annual reviews, consistent with the Shariah Supervisory Board’s guidelines, on company operations and fund activities. Such reviews may concern ongoing operations, income purification, and new developments, or they may involve reviewing individual completed transactions to verify that certain operational goals have been achieved and specific actions taken.