Selection And Management Of Sharia Compliant Funds

Course Overview

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

Course Objectives

To acquaint participants with the types of funds compatible with Sharia, how to select them and manage them

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 return 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