Islamic Finance Academy
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This five day intensive practical programme features everything you need to know about Islamic Finance.
The course provides detailed and comprehensive analysis into all major areas of Islamic Banking and Finance. Relevant theory is covered with the primary focus on practical application and use of all products in the global Islamic finance markets. Guidance will be provided on such issues as: Analysis of current market practices and what products and structures are utilized, and why Developing new products for your clients and markets Structuring products from the building block of theory (Islamic law) through to the final end product Impact on each group of stakeholders (Scholars, structurers, legal, marketing, operations, risk, execution etc) This course has been designed for professionals that have had little or no exposure to Islamic Finance (via the initial Overview module) through to those already exposed and working in the field requiring more detailed guidance and information.
It will broaden your knowledge of the industry and markets, as well as understanding all the major products used globally, and the characteristics and risk management aspects associated with them.
Section 1 Introduction to Islamic finance and banking
Islamic commercial laws and rules (including contract law)
- Sources of Islamic law
- The view on money in Islam
- Enterprise vs debt creation
Islamic vs conventional banking – similarities and differences
- What is the overlap between the aims of the Islamic and conventional markets in terms of desires of market participants and preferred outcomes?
- Outline of key activities of conventional banks and which of these activities may not be Shariah compliant
- Riba, Gharar, Maysir
- An explanation of these principles and examples of each
Overview of acceptable contractual forms
- Sale contracts
- Investment and management contracts
The activities and balance sheet of a major Islamic bank
- A detailed case study of the balance sheet of a major global Islamic bank
Overview of global Islamic markets – development and growth, challenges
- What are the key market sectors?
- How have they grown since inception and what are the major contributing factors?
- What challenges are faced by market participants?
Islamic commercial contracts in conventional courts – what we have learned so far
- Discussion of outcomes of defaults and court cases
- Beximco, East Cameron Gas Sukuk, Dana Gas Sukuk
Section 2 Retail Islamic banking products
Current and savings accounts
- Using Murabaha and Mudarabah contracts
- Case study of Mudarabah deposit (Qatar Islamic Bank)
Home purchase finance structures
Murabaha home finance
- Case studies
- The advantages and disadvantages (in relation to ownership, risk, variable rate financing and valuation of debt outstanding)
Diminishing Musharakah finance
- How it works and its advantages over Murabaha home finance
- Market example – Meezan Bank
Car purchase finance structures
- Ijara, including market examples
- Murabaha / goods finance
- Tawarruq financing
Islamic credit cards
- Analysis of different contracts used in the market
Section 3 Key Contractual Forms and case studies
Differences between conventional leasing and Ijara
Market examples of the utilisation of this contract in practice
- Car Ijara
- Home finance
Murabahah, Tawarruq and Musawamma
- Application in asset financing, working capital finance, and general credit provision
- Murabaha goods finance vs Tawarruq financing
- Murabaha Sukuk
- Market examples
Project finance – Istisna (including Sukuk)
- Diminishing Musharakah home finance
Investments and funds
- Market examples and term sheets
Why this is the preferred contractual form for fund and asset management
Comparison to murabaha deposits
How to identify and mitigate the new risks arising from utilising an investment contract for deposit products
Sukuk overview, and relevant structures
Section 4 Sukuk – detailed analysis and transaction case studies
Ijara. Mudarabaah, Musharakah, Murabahah, Wakala, Hybrid
Equity-linked Sukuk (exchangeable, convertible Sukuk)
Each structure will be covered, along with analysis of how and why the market developed to accommodate such structures
How to develop debt capital markets products using classing contractual forms
The issue of Shariah compliance
- Who does this responsibility fall upon
- How is this managed in practice?
- What are the implications?
- Why this can be important
- The concept of credit risk vs asset price risk in asset-backed structures
- The approach of credit ratings agencies
- How are these defined
- What occurs upon a default?
- Asset risk vs credit risk for investors
The issue of a True Sale and Sukuk structures
AAOIFI Shariah standards and Sukuk controversy
- How did this arise?
- What were the consequences for the market?
Detailed case studies
Section 5 Investments
Equity investments and funds
- The process of Shariah compliance and screening
- The concept of financial screening
Three levels of Shariah compliance
The assets themselves
Acquiring exposure to the assets
The contractual arrangements between the investors and the fund manager
What occurs when something goes wrong?
- Key principles
Shariah compliant target companies
Key asset classes – in each area we will cover how the funds are structured, how the investments / asset acquisitions occur, and they key legal and structuring areas
- What is it and who wants it?
- How do conventional investments provide capital protection, and why is this not Shariah compliant?
- How can we deliver this protection in an acceptable manner?
- The connection between capital protection and derivatives
- The issue of liquidity
- What are they, and how do they operate?
- How to structure Islamic notes
- The issue of liquidity, again
Payout on performance of an index or benchmark
- When is this desirable?
- What is permissible for referencing payouts?
- What key structures and contracts are utilised to deliver Shariah compliant products?
Why conventional insurance is not permitted
- The elements of Maysir and Gharar in an insurance contract?
- Is conventional insurance impermissible in all circumstances?
Key features of Takaful
- Major contractual forms used
- Key structures utilised in the market, with market examples
- The concept of Takaful Operator (as opposed to an insurance company)
- How do operators run their business and how do they make profits?
Overview of Takaful market
- Analysis of market development and growth
- Challenges faced by the market globally
ReTakaful and Re-insurance
- The importance of ReTakaful to the continued growth of the Takaful markets
- The role played by Re-insurance to fill gaps in the market
Who should attend
- Islamic bankers
- Corporate financiers
- Investment bankers
- Private bankers
- Corporate and commercial bankers
- Portfolio managers
- Investment advisors
- Consultants and lawyers
- Governmental representatives
- Compliance professionals
- Asset-liability managers
- Risk managers
- Internal auditors
- In-house counsels
- Internal auditors
- Islamic banking professionals
- Product development professional
- Shari’ah auditors
- Shari’ah supervisory board members
- Conventional bankers and financiers offering Islamic finance services
- Fund- and asset managers
- Islamic insurers and operational staff
- Financial journalists
- Private equity investors and fund managers