Download Brochure

Fundamentals Of Islamic Finance

The global market for Sharia compliant financial products and services is continuing to grow at a rapid rate. One of the key issues most western financial institutions face is gaining an understanding of the nuances and differences between conventional and Islamic financial products. Designed to expel the confusion and complexity surrounding Islamic finance, the course will provide you with a firm understand of the structures, risks and opportunities in the global Islamic Finance marketplace. 

Course Highlights

During this highly practical two-day course you will learn:

  • The distinguishing features and core principles central to Islamic investment and finance
  • The key role of Islamic law and how Sharia boards make their decisions
  • How to understand the distinctive asset classes and their role within modern financial markets
  • The practicalities of Salam and its derivative Istisna’a
  • The development and intricacies of Islamic Retail and wholesale banking
  • The impacts on wealth management and private banking

For details of the course trainer, please download the course brochure

Booking Information

Dates Prices Book This Course Discount
01 - 02 Nov 2010
£ 1899
Book the course now.
-
09 - 10 May 2011
£ 1899
Book the course now.
-

Course Programme

An Introduction to the Islamic Financial Market

Understanding the key principles behind Islamic Finance and its international growth potential. This section will help establish the course parameters within the context of the growing global demand for Sharia'a compliant financial services.

  • Defining the Islamic Financial Marketplace
  • The rationale for the growth in Sharia'a compliant financial products
  • Exploring how the market has evolved internationally to date
  • Its importance, role and relevance in today's financial world
  • Riba (Usury) and its prohibition
  • Gharar and Maysir (Uncertainty and speculation) 

Understanding the Core Principles of Islamic Investment & Finance

An introduction to the simple Islamic rules that recur in the structuring and execution of Islamic Financial transactions.

  • What is the role of Islamic Law?
  • Understanding the role and importance of the Sharia'a
  • Comparing the differences between Islamic and conventional finance
    • What is permitted and prohibited under Islamic law
    • The process of structuring a Sharia'a compliant product
  • Understanding the guidelines
    • The convergence of practices under AAOIFI and IFSB guidance
    • Why certain preferences have developed in the GCC compared to Southeast Asia 

Overview of the Sharia'a Tools

  • Discussion of how riba affects contracts in a practical way
  • Overview of the most commonly applied Islamic contracts
  • Discussion of their general precepts, strengths and weaknesses
  • How do these change a bank's balance sheet structure

Understanding Asset Classes

This segment introduces participants to the nominative Islamic financial contracts and places them in context with the principles as discussed previously. 

Murabaha contract (sales)

  • Defining Murabaha contract
  • Murabaha on Credit – Deferred Payment
  • Late payment treatment
  • Murabaha Syndicate Trade Mechanics
  • Revolving Murabaha 

Case study: A micro case to stimulate discussion relating to choice of asset type for specific purposes 

More Islamic Asset Classes

Tawarruq

  • Cash murabaha concepts of tawarruq and bai al ainah contrasted
  • Their market popularity discussed
  • Applications to replace existing debt or synthesise revolvers reviewed 

Ijara (leasing)

  • Basic operating ijara
  • jara muntahia bi tamleek
  • AAOIFI and IFSB standards
  • Applications in the modern financial world 

Salam (Forward Sales)

  • Defining the contract
  • Parallel Salam
  • AAOIFI and IFSB standards
  • Applications in the modern financial world 

Istisna (Construction or Manufacturing)

  • Defining Istisna contract
  • Parallel Istisna
  • AAOIFI and IFSB Standards
  • Applications in the modern financial world 

How to organise money in Islamic Finance

The profit and loss sharing contracts: musharaka and mudaraba

    • What are the broad Islamic rules
    • How do these mesh with modern business combinations and special purpose concepts
  • Musharaka (Partnership)
  • Mudaraba (Silent Partnership)
  • Wakalah (Agency) 

Applications and Considerations for Wealth Management & Private Banking

  • Understanding the core principles of Islamic Investment
  • Screening issues
  • Considerations for the investment manager
  • Providing clients with Sharia'a compliant
  • Advisory services
  • Funds Management challenges
  • Stock market funds
  • Islamic hedge funds 

The Islamic Capital Market

  • Getting to grips with the Islamic Capital Market structures
  • Defining sukuk
  • Deal origination
    • Where and how is the market developing
    • What is the evolution of instrument selection
    • GCC and Malaysian convergence in the sukuk space
  • Why certain nominative contracts may be applied easily in the sukuk space, and others are more problematic
  • Syndications compared to sukuk 

Case study: Qatar Global Sukuk – case study of the typical sukuk al ijara. 

The Trouble with Derivatives & Sharia'a

  • Four common risk management tools
  • Understanding the Sharia'a limitations of derivatives due to the need to prevent riba
  • Sample of the simple FX hedge 

Regulatory and Capital Issues

  • Who are the key regulatory bodies
  • How do these interact in the global system
  • What are the main regulatory challenges of Islamic financial institutions
    • Profit Sharing deposits – equity, debt or quasi equity
    • Displaced commercial risk
    • What are the proper ways to understand instrument risk 

Review on the Whole Process: how are Sharia'a Decisions made?

  • How is the choice of law managed in transactions?
  • What are the procedures of Sharia'a opinion delivery?
  • What influences the steps and process?
  • We first look at the process for Sharia'a committees, then return to a prior exercise in order to determine how the process worked.