Shariah Governance Rail

Shariah board management, fatwa issuance, scholar oversight, and governance compliance workflows.

Overview

The Shariah Governance rail provides the organizational and procedural framework for ensuring that all financial products, contracts, and operations on the platform adhere to Islamic law. It manages the composition and activities of Shariah Supervisory Boards (SSBs), tracks fatwa requests and rulings, and enforces governance policies defined by AAOIFI Governance Standard No. 1 and IFSB-10.

Every financial product and contract type on the platform requires Shariah board approval before it can be offered to customers. This rail manages the end-to-end approval workflow: a product team submits a product for review, Shariah scholars examine the structure and documentation, they may request modifications, and ultimately issue a fatwa (ruling) approving or rejecting the product. All deliberations and decisions are permanently recorded.

The rail also handles periodic Shariah audits where the board reviews a sample of executed transactions to verify ongoing compliance. Non-compliant transactions are flagged for remediation, and income derived from non-compliant activities is quarantined for purification (donation to charity).

Board member credentials, qualifications, tenure, independence requirements, and conflict-of-interest declarations are maintained within the rail, satisfying regulatory requirements for Shariah governance transparency.

Endpoints

Create Fatwa Request

POST /v1/rails/shariah-governance/fatwa-requests

const request = await iof.shariahGovernance.createFatwaRequest({
  subject: "Murabaha with variable markup structure",
  category: "product_approval",
  product_type: "murabaha",
  description:
    "Review of proposed variable-rate Murabaha using commodity benchmark",
  documents: [
    { name: "product_term_sheet.pdf", url: "s3://docs/term_sheet.pdf" },
    { name: "legal_opinion.pdf", url: "s3://docs/legal_opinion.pdf" },
  ],
  priority: "high",
  requested_by: "user_product_mgr_001",
});

Response:

{
  "id": "ftw_xyz",
  "reference": "FTW-2024-00089",
  "status": "SUBMITTED",
  "category": "product_approval",
  "subject": "Murabaha with variable markup structure",
  "priority": "high",
  "assigned_scholars": [],
  "created_at": "2024-01-15T10:30:00Z"
}

Get Fatwa Request

GET /v1/rails/shariah-governance/fatwa-requests/:id

List Fatwa Requests

GET /v1/rails/shariah-governance/fatwa-requests

Issue Fatwa Ruling

POST /v1/rails/shariah-governance/fatwa-requests/:id/ruling

const ruling = await iof.shariahGovernance.issueRuling({
  fatwa_request_id: "ftw_xyz",
  decision: "approved_with_conditions",
  conditions: [
    "Benchmark must be commodity-based, not interest-rate-based",
    "Rate reset mechanism must use Tawarruq structure",
  ],
  scholars: ["scholar_001", "scholar_002", "scholar_003"],
  rationale: "The proposed structure is permissible provided...",
});

List Board Members

GET /v1/rails/shariah-governance/board/members

Add Board Member

POST /v1/rails/shariah-governance/board/members

Schedule Shariah Audit

POST /v1/rails/shariah-governance/audits

Get Audit Report

GET /v1/rails/shariah-governance/audits/:id

File Conflict of Interest Declaration

POST /v1/rails/shariah-governance/board/members/:id/coi-declarations

Fatwa Status

Status	Description
`SUBMITTED`	Request submitted for review
`UNDER_REVIEW`	Scholars actively reviewing
`ADDITIONAL_INFO_NEEDED`	More information requested from submitter
`APPROVED`	Fatwa issued, product approved
`APPROVED_WITH_CONDITIONS`	Approved subject to specific conditions
`REJECTED`	Product structure deemed non-compliant
`SUPERSEDED`	Replaced by a newer fatwa

Audit Types

Type	Description
`periodic`	Scheduled quarterly or annual review
`transaction`	Sample-based review of executed transactions
`product`	Deep review of a specific product line
`incident`	Triggered by a compliance concern or complaint

Integration Points

Compliance Rail — automated Shariah screening feeds into governance reviews
Contracts Rail — contract templates require fatwa approval
Funds Rail — fund prospectuses require Shariah board certification
Audit Rail — Shariah audit findings recorded alongside financial audits
Notifications Rail — alerts to scholars for pending reviews

Webhooks

Event	Description
`shariah_governance.fatwa.submitted`	Fatwa request created
`shariah_governance.fatwa.ruling`	Fatwa ruling issued
`shariah_governance.audit.scheduled`	Shariah audit scheduled
`shariah_governance.audit.completed`	Audit report finalized
`shariah_governance.board.member_added`	New scholar added to board
`shariah_governance.noncompliance.flagged`	Non-compliant transaction found

Standards

Next Steps

Compliance Rail - Automated Shariah screening
Governance Rail - General corporate governance
Audit Rail - Financial and operational audits