Presentation and Analysis of the Theme Network of Challenges and Solutions for Implementing Shariah Supervision in Iran's Capital Market

Authors

1 Associate Professor, Department of Finance, Faculty of Islamic Studies and Management, Imam Sadiq University, Tehran, Iran

2 Ph.D Student, Department of Finance, Faculty of Islamic Studies and Management, Imam Sadiq University, Tehran, Iran

3 Master’s Student, Department of Finance, Faculty of Islamic Studies and Management, Imam Sadiq University, Tehran, Iran

Abstract

Introduction and Objectives: Shariah governance and supervision are key components of Islamic financial markets and institutions. This supervision not only ensures compliance with Islamic principles but also plays a crucial role in enhancing market transparency and financial integrity. Internationally, organizations such as the Islamic Financial Services Board (IFSB) and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) have developed standards for governance and Sharia supervision, which have strengthened public trust in Islamic financial markets. Shariah supervision in Iran's capital market began in 2007 with the approval of the guidelines for establishing and operating the Specialized Fiqh Committee of the Securities and Exchange Organization. This committee has made significant efforts to align the capital market with Shariah principles; however, the implementation of Shariah supervision still faces numerous challenges, highlighting the need to identify, analyze, and propose appropriate solutions for these challenges. This study first examines the theoretical foundations of Sharia supervision and then, through semi-structured interviews with experts and the thematic analysis method, presents the challenges and solutions for its implem entation in the form of a theme network, including the overarching, organizing, and basic levels. The aim of this research is to present and analyze the challenges and solutions for implementing Shariah supervision with the goal of improving Shariah supervision in Iran’s capital market.
Methodology: This research is qualitative and applied in nature, conducted using documentary studies and interviews with 12 experts, and the data were analyzed through the thematic analysis method. Thematic analysis is a method for identifying, analyzing, and organizing qualitative patterns that transform scattered data into structured information. The research uses the theme network as an analytical framework, which includes three levels of basic, organizing, and overarching themes. To answer the research question regarding the challenges and solutions for implementing Shariah supervision in Iran's capital market, the following steps were undertaken:

Design and revision of interview questions based on documentary study.
Semi-structured interviews with 12 experts using purposive sampling until theoretical saturation was achieved.
Data analysis using MAXQDA 2020 software and extraction of themes at three levels.
Review of themes in four stages, with no changes in the last two rounds, achieving theoretical saturation.
Extraction of 893 final codes, including 2 overarching codes (diagnosis and solutions), 32 organizing themes, and 176 basic themes.

Visualization and analysis of the theme network to provide a structured overview of the challenges and solutions for Shariah supervision.
Results: The findings indicate that the main challenges can be grouped into 15 key areas, including the structure of the current Shariah supervision model, scope of supervision, composition and tenure of members, conflict of interest, mechanisms for replacing and terminating members, the process of reviewing issues, education and cultural development, the performance of the Fiqh Secretariat, the performance of the Islamic Studies Department, the performance of the Sub-committee on Capital Market in Qom, evaluation of new financial instruments, responding to Fiqh doubts, training and retention of human resources, communication and interactions, and the qualification of members. The study also proposes solutions corresponding to each of these challenges. Some of these solutions include establishing mechanisms for the use of Shariah consultants, expanding the scope of supervision, implementing post-supervision, formalizing the qualification of committee members, planning for the improvement of Islamic and Shariah financial literacy among investors, creating a Shariah accountability system, and improving the structure and performance of task forces.
Discussion and Conclusions: The analysis of the research findings indicates that in order to improve the effectiveness of Shariah supervision in Iran’s capital market, it is essential to adopt appropriate solutions in each of these areas. Based on the research results, the policy and executive recommendations for improving Shariah supervision in Iran’s capital market include developing guidelines for Shariah consultants to ensure compliance with Shariah principles, creating a Shariah supervision index for ranking financial institutions and issuers, establishing a Shariah accountability system, and revising the guidelines for the formation and activities of the Shariah Committee of the Securities and Exchange Organization. Additionally, suggestions for increasing transparency in the processes of the Shariah Committee, managing conflicts of interest, requiring periodic performance reports, and enhancing international relations are included. Furthermore, establishing mechanisms for monitoring the implementation of Shariah Committee resolutions, creating a Shariah supervision checklist, and improving the implementation of Shariah principles in the capital market are also among the solutions that could help enhance the efficiency of Shariah supervision.
JEL Classification: G21, G29, Z12.
Acknowledgement: Gratitude and appreciation are extended to the Research, Development, and Islamic Studies Management of the Securities and Exchange Organization of Iran for their cooperation.

Keywords

References

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