Corporate governance and Shariah compliance in institutions offering Islamic financial services

The structures and processes established within an institution offering Islamic financial Services (IIFS) for monitoring and evaluating Shariah compliance rely essentially on arrangements internal to the firm. By being incorporated in the institutional structure, a Shariah supervisory board (SSB) has the advantage of being close to the market. Competent, independent, and empowered to approve new Shariah-conforming instruments, an SSB can enable innovation likely to emerge within the institution. The paper reviews the issues and options facing current arrangements for ensuring Shariah compliance by IIFS. It suggests a framework that draws on internal and external arrangements to the firm and emphasizes market discipline. In issuing its fatwas, an SSB could be guided by standardized contracts and practices that could be harmonized by a self-regulatory professionals'association. A framework with the suggested internal and external features could ensure adequate consistency of interpretation and enhance the enforceability of contracts before civil courts. The review of transactions would mainly be entrusted to internal review units, which would collaborate with external auditors responsible for issuing an annual opinion on whether the institution's activities has met its Shariah requirements. This process would be sustained by reputable entities such as rating agencies, stock markets, financial media, and researchers who would channel signals to market players. This framework would enhance public understanding of the requirements of Shariah and lead to more effective options available to stakeholders to achieve improvements in Islamic financial services.Banks&Banking Reform,Corporate Law,National Governance,Non Bank Financial Institutions,Governance Indicators

Corporate governance and stakeholders'financial interests in institutions offering Islamic financial services

This paper focuses on the corporate governance arrangements of institutions offering Islamic financial services (IIFS) aimed at protecting stakeholders'financial interests. Many IIFS corporate governance issues are common with those of their conventional counterparts. Others are distinctive. In particular they offer unrestricted investment accounts that share risks with shareholders but without a voting right. This paper first reviews internal and external arrangements put in place by IIFS to protect stakeholders'financial interests. It discusses shortcomings notably in terms of potential conflict of interest between shareholders and holders of unrestricted investment accounts. It then suggests a corporate governance framework that combines internal and external arrangements to provide safeguards to unrestricted investment account holders without overburdening IIFS'financial performance. The paper uses a review of 13 IIFS and regulatory information from countries where IIFS have developed the most.Banks&Banking Reform,Financial Intermediation,Corporate Law,Non Bank Financial Institutions,Investment and Investment Climate

Corporate governance in institutions offering Islamic financial services : issues and options

This paper reviews institutions offering Islamic financial services (IIFS) corporate governance challenges and suggests options to address them. It first points out the importance of corporate governance for IIFS, where it would require a distinct treatment from conventional corporate governance and highlights three cases of distress of IIFS. It then dwells on prevailing corporate governance arrangements addressing IIFS'needs to ensure the consistency of their operations with Islamic finance principles and the protection of the financial interests of a stakeholders'category, namely depositors holding unrestricted investment accounts. It raises the issues of independence, confidentiality, competence, consistency, and disclosure that may bear on pronouncements of consistency with Islamic finance principles. It also discusses the agency problem of depositors holding unrestricted investment accounts. The paper argues for a governance framework that combines internal and external arrangements and relies significantly on transparency and disclosure of market relevant information.Banks&Banking Reform,Corporate Law,Non Bank Financial Institutions,Investment and Investment Climate,Privatization

Clues on black hole feedback from simulated and observed X-ray properties of elliptical galaxies

The centers of elliptical galaxies host supermassive black holes that significantly affect the surrounding interstellar medium through feedback resulting from the accretion process. The evolution of this gas and of the nuclear emission during the galaxies' lifetime has been studied recently with high-resolution hydrodynamical simulations. These included gas cooling and heating specific for an average AGN spectral energy distribution, a radiative efficiency declining at low mass accretion rates, and mechanical coupling between the hot gas and AGN winds. Here we present a short summary of the observational properties resulting from the simulations, focussing on 1) the nuclear luminosity; 2) the global luminosity and temperature of the hot gas; 3) its temperature profile and X-ray brightness profile. These properties are compared with those of galaxies of the local universe, pointing out the successes of the adopted feedback and the needs for new input in the simulations.Comment: 15 pages, 6 figures, accepted for publication in Advances in Space Researc

Regulation of the yeast metabolic cycle by transcription factors with periodic activities

<p>Abstract</p> <p>Background</p> <p>When growing budding yeast under continuous, nutrient-limited conditions, over half of yeast genes exhibit periodic expression patterns. Periodicity can also be observed in respiration, in the timing of cell division, as well as in various metabolite levels. Knowing the transcription factors involved in the yeast metabolic cycle is helpful for determining the cascade of regulatory events that cause these patterns.</p> <p>Results</p> <p>Transcription factor activities were estimated by linear regression using time series and genome-wide transcription factor binding data. Time-translation matrices were estimated using least squares and were used to model the interactions between the most significant transcription factors. The top transcription factors have functions involving respiration, cell cycle events, amino acid metabolism and glycolysis. Key regulators of transitions between phases of the yeast metabolic cycle appear to be Hap1, Hap4, Gcn4, Msn4, Swi6 and Adr1.</p> <p>Conclusions</p> <p>Analysis of the phases at which transcription factor activities peak supports previous findings suggesting that the various cellular functions occur during specific phases of the yeast metabolic cycle.</p

Pancreatic cancer patient survival correlates with DNA methylation of pancreas development genes.

DNA methylation is an epigenetic mark associated with regulation of transcription and genome structure. These markers have been investigated in a variety of cancer settings for their utility in differentiating normal tissue from tumor tissue. Here, we examine the direct correlation between DNA methylation and patient survival. We find that changes in the DNA methylation of key pancreatic developmental genes are strongly associated with patient survival