Higher Shari’ah Authority
The Higher Shari’ah Authority (“HSA”) was established, and its Members appointed, in accordance with resolutions enacted by the UAE Cabinet. Decretal Federal Law No. (14) of 2018, regarding the Central Bank and organisation of financial institutions and activities and its amendments, reaffirmed HSA’s establishment and provided further details of its mandate. The law includes the obligations and responsibilities of the HSA, which aims to standardize and harmonize practice within the Islamic finance industry, aligning them with internationally- recognized Shari’ah standards and widely-recognized practices through collaboration with relevant stakeholders. The HSA’s goal is to support the creation of a robust infrastructure that enables further development of the UAE’s Islamic finance industry, and advances the UAE’s vision in becoming an internationally-recognized hub for Islamic finance.
The law mandated the HSA to determine the rules, standards and general principles applicable to Shari’ah-compliant businesses and licensed financial activities, and to undertake supervision and oversight of the Internal Shari’ah Supervision Committees of licensed Islamic financial institutions. In addition, HSA is mandated to approve Islamic monetary and financial tools developed by the CBUAE to manage monetary policy operations in the UAE. The HSA also provides its opinion on specific regulatory rules and instructions relating to the operations and activities of licensed Islamic financial institutions.
Governance and Standardisation of Practices
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1
Shari’ah Governance
The enhancement of Shari’ah governance across Islamic financial institutions and Takaful insurance companies to ensure all institutional activities and transactions conform to the principles and rulings of Islamic Shari’ah.
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2
Sukuk and Syndicated Transactions
The unification of Shari’ah perspectives in relation to Sukuk, repurchase agreements (repo), and syndicated transactions. The HSA contributed to the review of the first sovereign Sukuk issuance to support the establishment of infrastructure for Shari’ah-compliant investment alternatives.
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3
Legal Certainty
A significant contribution to the drafting of Decretal Federal Law No. (50) of 2022 concerning commercial transactions, which is recognized as the first law to provide legal certainty in respect of Shari’ah-compliant contracts.
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4
Standardisation of Practices
The adoption of internationally recognised Shari’ah standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the mandatory implementation of these standards by Islamic financial institutions operating in the UAE, In addition to issuing resolutions and standards that take into account the specific nature of UAE practices and keep pace with innovation and development.
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5
Approval of New Products
The issuance of specific guidelines concerning the submission process for new Shari’ah-compliant products, and specifically retail products which enhance commitment to Islamic law and consumer protection.
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The issuance of guiding principles to promote sustainable Islamic finance, encouraging Islamic financial institutions to integrate environmental and social considerations into their operations and activities.
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Participation in the development of a roadmap for sustainable Islamic finance, which was jointly signed by key Islamic finance infrastructure organizations, including the Islamic Financial Services Board (IFSB), the General Council for Islamic Banks and Financial Institutions (CIBAFI), and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
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The issuance of a resolution regarding trainee members of internal Shari’ah supervisory committees, aimed at requiring Islamic financial institutions and Takaful insurance companies to actively develop and empower talent amongst UAE nationals. This initiative seeks to cultivate a new generation of UAE Shari’ah scholars specialising in Islamic finance.
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The UAE has established itself as a global leader in Islamic finance and a reference point for supervisory and regulatory authorities seeking to benefit from the nation’s experience in this field.
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The HSA and its Secretariat continue to facilitate the exchange of knowledge and provide resources, training, and guidance to local entities.
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The HSA has published several specialized reports on Islamic finance to shed light on industry practices, including:
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1. Islamic Finance Report – United Arab Emirates, 2023
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2. Takaful Insurance Report – United Arab Emirates, 2022
HSA Members
Shari’ah Governance Standards
Standard Re. Shari'ah Governance For Islamic Financial Institutions
Standard Re. Regulatory Requirements for Financial Instituitions Housing an Islamic Window
Guidance Note Re Annual Shari'ah Report of Internal Shari'ah Supervision Committee
Guidance Note Re Charter of Internal Shari'ah Supervision Committee
Standard Re Shari’ah Compliance Function At Islamic Financial Institutions
Guidance Note Re Shari’Ah Compliance Function At Islamic Financial Institutions
Standard Re External Shari’ah Audit for Islamic Financial Institutions
Standard Re External Shari’ah Audit for Takaful Insurance Companies
Last updated on: Tuesday 08 July 2025
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