scholarly journals Sukuk Default Regulation in Malaysia and United Arab Emirates: Comparative Analysis

2019 ◽  
Author(s):  
International Journal of Fiqh and Usul al-Fiqh Studies
Keyword(s):  
Comparative Analysis ◽  
United Arab Emirates ◽  
Capital Market ◽  
Regulatory Framework ◽  
Court Decision ◽  
Islamic Finance ◽  
Moral Hazards ◽  
Finance Industry ◽  
Market Framework ◽  
The Right

The nascent Islamic finance industry is still facing the challenges of uncertainties in legal regimes, Sharī’ah interpretations, the right of investors, and remedies in default circumstances. The event of Sukūk default is one of the significant challenges faced by the Islamic capital market. The recent Dana Gas Sukūk default triggered by Sharī’ah compliance interpretations has shown the extent of danger that moral hazards could cause to the entire Islamic finance space. Scholars have argued that the Sharī’ah-compliant arguments witnessed in the industry were because of the nature of the capital market framework of any particular jurisdiction and were not significantly Sharī’ah issues. This study aims to carry out a brief comparative analysis of the default cases in Malaysia and the United Arab Emirates (UAE). The study compares the legal jurisdiction and regulatory framework in summary-background of the judges and court decision samples based on these structures and how they have influenced Sukuk default regulations in the jurisdiction. This study employs a comparative analysis by considering fundamental elements in the regulatory framework.

scholarly journals The Application of Ju'alah in Islamic Finance: The Malaysian Perspective

2020 ◽  
Vol 7 (1) ◽  
pp. 29-41
Author(s):  
Ismail Mohamed ◽  
Mohd Rafede Mohd ◽  
Aishath Muneeza
Keyword(s):  
Capital Market ◽  
Islamic Finance ◽  
Specific Reference ◽  
Islamic Banking ◽  
Finance Industry ◽  
Potential Applications

Ju’alah is one of the least researched types of Shariah contracts used in Islamic finance. The objective of this paper is to explore the current and potential applications of Ju’alah with specific reference to Malaysian Islamic banking, takaful and the Islamic capital market. This paper establishes that there is potential for using Ju’alah in Islamic finance as a primary and/or secondary contract. It also establishes that Ju’alah can be used in takaful, though it is not being currently used for this in Islamic banking and the Islamic capital market in Malaysia. It is anticipated that the findings of this paper will improve understanding of the practice of Ju’alah in the Malaysian Islamic finance industry.

scholarly journals Contemporary Challenges Confronting Islamic Banking & Finance

2015 ◽  
Vol 55 ◽  
pp. 86-94
Author(s):  
Muhammad Asif Khan ◽  
Muhammad Waseem Shehzad ◽  
Muhammad Atif Khan
Keyword(s):  
Capital Market ◽  
Regulatory Framework ◽  
Western Society ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Reporting Standards ◽  
Financial Instruments ◽  
Tabular Form ◽  
Banking And Finance

The philosophy of Islamic economics is “brining economics in consonance with Shariah”, guiding Islamic banking and finance to abolish interest from operations, has reported a monumental growth, envisaged the most lucrative and unsusceptible segment of the economy. Islamic finance is undoubtedly flourishing worldwide entails trajectory development but at other front it encounters a number of impediments in development since its inception. The emphasis of this study is to encapsulate in tabular form, the contemporary problems and challenges Islamic finance has encountered during the span of last 28-years from 1988 to 2015. The austere Shariah compliance; regulatory and prudential challenges; misconception among western society about Islamic banking philosophy; unavailability of money and capital market for scant Islamic financial instruments; piercing competition; privation of Islamic banking and finance awareness; absence of uniform reporting standards; complexities of regulatory and supervisory issues; lack of central supervisory body, governance and dearth of consensus among Shariah scholars been the precarious challenges among many others. A unified central regulatory and supervisory mechanism required in converging sprinkled Islamic finance practices and to foster a synchronized and standardized regulatory framework consensus need to be developed among all Shariah scholars

scholarly journals Comparative Analysis on Shariah Governance in Malaysia: SGF 2010, IFSA 2013 and SGPD 2019

2020 ◽  
Vol 10 (1) ◽  
pp. 110 ◽  
Author(s):  
Muhammad Iqmal Hisham Kamaruddin ◽  
Mustafa Mohd Hanefah ◽  
Zurina Shafii ◽  
Supiah Salleh ◽  
Nurazalia Zakaria
Keyword(s):  
Comparative Analysis ◽  
Financial Institutions ◽  
Financial Services ◽  
Islamic Finance ◽  
Policy Document ◽  
Finance Industry ◽  
The World ◽  
Governance Practices ◽  
Islamic Financial Institutions ◽  
Shariah Governance

The main focus of shariah governance for an organization is to ensure that it is comply with shariah laws and regulations. Under Islamic finance industry, shariah governance is being given attention due to rapid growth of this industry in the world. For Malaysia, the authority through Bank Negara Malaysia (BNM) have taken a proactive role by introducing shariah governance guidelines including the Shariah Governance Framework (SGF) 2010, the Islamic Financial Services Act (IFSA) 2013 and the latest is the Shariah Governance Policy Document (SGPD) 2019. These shariah governance guidelines are supposed to support the development of shariah governance practices especially by Islamic Financial Institutions (IFIs) in Malaysia. However, there is limited to none study conducted to compare these guidelines. These shariah governance guidelines is necessary to be compared in order to find out whether these guidelines are complemented each other and to identify any differences among these guidelines. Therefore, the aim of this study is to compare between these shariah governance guidelines. Based on the analysis, it has been found that SGPD 2019 is the most comprehensive covers on shariah governance as compared to IFSA 2013 and SGF 2010. However, these three guidelines still not become comprehensive enough, as there is still limited to none discussion on the definition and objectives of shariah governance itself.

scholarly journals Islamic Financial Law and the Law of the United Arab Emirates: Disjuncture and the Necessity for Reform

2019 ◽  
Vol 33 (2) ◽  
pp. 152-178
Author(s):  
Jonathan George Ercanbrack
Keyword(s):  
United Arab Emirates ◽  
Islamic Finance ◽  
Legal Systems ◽  
Recent Event ◽  
Investor Confidence ◽  
Finance Industry ◽  
The Law ◽  
Relationship Of ◽  
The Relationship ◽  
Securities Laws

Abstract Islamic financial law (IFL), an emerging global legal order, is a highly fragmented law comprised of both state and non-state generated laws, standards, commercial practices, institutions, fatwās and legal ideas. A recent event involving ṣukūk issuance in which Dana Gas claimed that its ṣukūk were no longer Sharīʿah-compliant highlights the legal disjuncture between global IFL and the laws of municipal legal systems, which have chosen to facilitate and regulate Islamic finance. Systemic legal issues or ‘legal gaps’ undermine investor confidence and impede sustainable development of the Islamic finance industry. Legal gaps include but are not limited to undeveloped securities laws, enforceability issues and a lack of clarity with respect to the role and effect of the Sharīʿah in the municipal legal systems of many MENA (Middle East/North Africa) states. This paper analyses these gaps and in so doing illustrates the relationship of IFL to the law of the United Arab Emirates.

Sukuk as an Attractive Alternative of Funding and Investment in Tunisia

2015 ◽  
Vol 3 (1) ◽  
pp. 60
Author(s):  
Hajer Chermi ◽  
Yacin Jerbi
Keyword(s):  
Private Sector ◽  
Capital Market ◽  
Government Funding ◽  
Islamic Finance ◽  
Attractive Alternative ◽  
Special Focus ◽  
Financial Instruments ◽  
Key Factors ◽  
Finance Industry ◽  
The Past

During the past decade, the Islamic finance industry has witnessed significant developments, particularly in the field of Sukuk (Islamic bonds). Sukuk represent one of the most successful products in Islamic finance. They have attracted the attention of several investors and become increasingly popular in various markets worldwide. They have gained prominence as financial instruments serving both government funding through the issuance of sovereign sukuk and private sector funding through corporate sukuk. This paper starts by providing a brief overview on the sukuk structuring and on the major developments in the flourishing world Islamic capital market. It then investigates the Malaysian sukuk market, with special focus on the key factors contributing to its successful experience. The paper concludes by explaining the ways through which sukuk represent an attractive alternative of funding and investment for Tunisia, taking into account that Tunisia is preparing for its first issuance of sovereign sukuk in the second term of 2013. The promising potential sukuk is also demonstrated through comparing measures taken by the Tunisian and Malaysian governments. 

Development, Growth and Challenges of Islamic Capital Markets: Comparative Insights from the Malaysian, Indonesian, United Arab Emirates and Brunei Markets

2013 ◽  
Vol 1 (3) ◽  
pp. 100 ◽  
Author(s):  
Syed Faiq Najeeb ◽  
Mirza Vejzagic
Keyword(s):  
United Arab Emirates ◽  
Capital Markets ◽  
Islamic Finance ◽  
Local Authorities ◽  
Muslim Population ◽  
Finance Industry ◽  
Societal Welfare ◽  
Significant Interest ◽  
Current Growth ◽  
Future Plans

Despite initiatives and discussions in many countries to introduce Islamic capital markets, the share of non-banking assets in the global Islamic finance industry remains small. Islamic banking continues to dominate the Islamic finance portfolio with a gigantic 80.9% contribution towards the total Islamic finance assets as at year end 2011. Based on such statistical reality, one may wonder, what are the current growth and development trends of Islamic Capital Markets (ICMs)? To this end, this paper assesses the development, growth and challenges of Islamic Capital Markets in Malaysia, Indonesia, United Arab Emirates, and Brunei and critically analyses the fundamental factors that contribute towards the liquidity, volume and trends of the Islamic Capital Markets in these countries. Using Malaysia as a benchmark, this paper provides a comparative analysis on the performance of the various sectors of Islamic capital markets such as equity markets, debt markets, fund management markets, liquidity markets, etc. amongst the four sample countries. In addition, the paper examines the local authorities? initiatives? and future plans for firmly establishing Islamic Capital Markets in their jurisdictions and further recommends potential policies that could be introduced to maximize economic gains and societal welfare from Islamic Capital Markets for the Muslim population in general. Overall, the findings from the paper are expected to attract significant interest from Islamic finance stakeholders, in particular to understand how local authorities and other players could possibly be instrumental in shaping the development of Islamic Capital Markets.

Bridging Islamic Juristic Differences in Contemporary Islamic Finance

2012 ◽  
Vol 26 (3) ◽  
pp. 313-337
Author(s):  
Younes Soualhi
Keyword(s):  
Dispute Resolution ◽  
Capital Market ◽  
Islamic Law ◽  
Middle Eastern ◽  
East Asian ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Finance Industry ◽  
Inherent Feature

Abstract This article is an attempt to formulate a viable Sharīʿah framework for juristic differences in contemporary Islamic finance. While acknowledging the legitimacy of juristic differences as an inherent feature of Islamic law, such differences could jeopardize a nascent Islamic finance industry, leading to what has come to be arbitrarily termed ‘Sharīʿah risk’ in Islamic finance. Two blocks appear to represent the two disputing sides since the launch of this industry, i.e., the Middle Eastern and South East Asian markets. Thus, this article aims to bridge differences in Islamic finance by proposing a framework and set of parameters that can be applied to all Islamic banking, Islamic capital market and takāful products. Apart from the outlined framework that aims to circumvent juristic disputes, this article concludes that juristic dispute resolution in Islamic finance will not be attainable until one can appreciate the legal and regulatory differences in which Islamic finance operates worldwide.

Exploring New Trends of Waqf in the Islamic Capital Market

2020 ◽  
pp. 192-222
Author(s):  
Salma Sairally ◽  
Marjan Muhammad
Keyword(s):  
Capital Market ◽  
Islamic Finance ◽  
Economic Issues ◽  
Finance Industry ◽  
Modern Context ◽  
Medieval Islam

The financial re-engineering of old concepts is a new trend in the field of Islamic finance. It has been termed as ‘New Horizon 2.0' by Shinsuke (2014)―an approach which aims to revitalize original instruments once practiced in medieval Islam to harness the potential of Islamic finance to better meet the needs of communities. It is also in line with the continuous innovative efforts of the industry to apply existing concepts, contracts, and instruments that are Shari'ah-compliant in the modern context to resolve contemporary socio-economic issues. In light of this background, this chapter examines how the age-old philanthropic concept of waqf has been integrated in the Islamic finance industry to revive its applications in contemporary societies. The chapter focuses on the inter-links between waqf and the Islamic capital market (ICM). Accordingly, it examines the new trends of waqf that have emerged in the ICM.

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