This training covers all the fundamental aspects of the selection and management of Islamic law (sharia)-compatible funds.

Learning Objectives:

At the end of this session, participants will be able to:

• Define sharia and sharia compliant funds;
• Apply the concept and practice of islamic finance;
• Identify haram, gharar, riba, murabaha, ijara, istisna, mudaraba, mousharaka, sukuk etc.;
• Design islamic finance compliant investment products.

Course Outline

• Islamic finance main instruments roundup
• Islamic finance principles: bans on riba, gharar, and maysir
• Financing operations related to the assets: murabaha, ijara, istisna'a
• Mudaraba-type contracts and Islamic trust mechanics
• Advance purchase transactions (bai salam, bai muajjal) and options (arbun)
• Setup of a sharia-compliant equity fund
• Defining the range of available investment options: industry exclusion criteria and financial exclusion criteria
• Defining of a sharia-compatible management style and a sharia-compatible turnover strategy
• Validation by a sharia board and implementation of a sharia compliance function
• Liquidity management, risk management and reporting
• Portfolio liquidity management: murabaha contracts and reverse murabaha contracts
• Portfolio hedging through Islamic Dow Jones index-based bai salam contracts
• Setup of a long/short Islamic fund under constraint
• Total returns swaps and use of the "purification" technique (tanqyya)
• Legal aspects, regulatory aspects and tax aspects
• Rights and duties of the investors (rabb'al mal) and brokers (mudarib)
• Levy on capital gains and dividends