The application of third party guarantee in structuring sukuk in the Islamic capital market: a preliminary literature survey

In the Islamic capital market, the Sukuk (Islamic investment certificates) segment is considered by key stakeholders in the Islamic financial services industry as the most vibrant segment in the global Islamic financial system. This paper provides a preliminary literature survey on the application o...

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Main Authors:	Issoufou, Chaibou, Oseni, Umar Aimhanosi
Format:	Article
Language:	English English
Published:	MCSER-Mediterranean Center of Social and Educational research 2015
Subjects:	HG Finance KBP Islamic Law
Online Access:	http://irep.iium.edu.my/46894/ http://irep.iium.edu.my/46894/ http://irep.iium.edu.my/46894/ http://irep.iium.edu.my/46894/1/The_Application_of_Third_Party_Guarantee_in_Structuring_Sukuk_in_the_ICM.pdf http://irep.iium.edu.my/46894/6/46894_The_application_of_third_party_guarantee_in_structuring_sukuk_SCOPUS.pdf

id	iium-46894
recordtype	eprints
spelling	iium-468942017-08-23T06:37:55Z http://irep.iium.edu.my/46894/ The application of third party guarantee in structuring sukuk in the Islamic capital market: a preliminary literature survey Issoufou, Chaibou Oseni, Umar Aimhanosi HG Finance KBP Islamic Law In the Islamic capital market, the Sukuk (Islamic investment certificates) segment is considered by key stakeholders in the Islamic financial services industry as the most vibrant segment in the global Islamic financial system. This paper provides a preliminary literature survey on the application of third party guarantee in Islamic capital market with specific reference to Sukuk transactions. The methodology adopted in this study leverages on the dynamics of comparative jurisprudential analysis of the different schools of thought in Islamic law from the classical to the modern jurists. Though this aspect of Islamic capital market is relatively in its infancy stage of development, the Islamic financial services industry is fraught with diverse practices where a perceptible disconnect is noticed between juristic ideals and practical application of third party guarantee in Sukuk structuring. Therefore, the paper finds that though the use of third party guarantee is permissible in Islamic capital market, there is however a proviso which must be adhered to – the voluntary nature of the guarantee. The guarantee should be provided without charging any fee, and this is applicable in commonly used sukuk products such as Sukuk al-ijarah, Sukuk al-mudarabah, and Sukuk al-istisna‘. It is however permissible to impose a compensatory fee in Sukuk al-istisna‘ in the case of failure to deliver the subject matter of the contract on the due date and the contractee has suffered a damage. MCSER-Mediterranean Center of Social and Educational research 2015 Article PeerReviewed application/pdf en http://irep.iium.edu.my/46894/1/The_Application_of_Third_Party_Guarantee_in_Structuring_Sukuk_in_the_ICM.pdf application/pdf en http://irep.iium.edu.my/46894/6/46894_The_application_of_third_party_guarantee_in_structuring_sukuk_SCOPUS.pdf Issoufou, Chaibou and Oseni, Umar Aimhanosi (2015) The application of third party guarantee in structuring sukuk in the Islamic capital market: a preliminary literature survey. Mediterranean Journal of Social Sciences, 6 (5). pp. 130-138. ISSN 2039-9340 http://www.mcser.org/journal/index.php/mjss/article/view/7471 10.5901/mjss.2015.v6n5p130
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English English
topic	HG Finance KBP Islamic Law
spellingShingle	HG Finance KBP Islamic Law Issoufou, Chaibou Oseni, Umar Aimhanosi The application of third party guarantee in structuring sukuk in the Islamic capital market: a preliminary literature survey
description	In the Islamic capital market, the Sukuk (Islamic investment certificates) segment is considered by key stakeholders in the Islamic financial services industry as the most vibrant segment in the global Islamic financial system. This paper provides a preliminary literature survey on the application of third party guarantee in Islamic capital market with specific reference to Sukuk transactions. The methodology adopted in this study leverages on the dynamics of comparative jurisprudential analysis of the different schools of thought in Islamic law from the classical to the modern jurists. Though this aspect of Islamic capital market is relatively in its infancy stage of development, the Islamic financial services industry is fraught with diverse practices where a perceptible disconnect is noticed between juristic ideals and practical application of third party guarantee in Sukuk structuring. Therefore, the paper finds that though the use of third party guarantee is permissible in Islamic capital market, there is however a proviso which must be adhered to – the voluntary nature of the guarantee. The guarantee should be provided without charging any fee, and this is applicable in commonly used sukuk products such as Sukuk al-ijarah, Sukuk al-mudarabah, and Sukuk al-istisna‘. It is however permissible to impose a compensatory fee in Sukuk al-istisna‘ in the case of failure to deliver the subject matter of the contract on the due date and the contractee has suffered a damage.
format	Article
author	Issoufou, Chaibou Oseni, Umar Aimhanosi
author_facet	Issoufou, Chaibou Oseni, Umar Aimhanosi
author_sort	Issoufou, Chaibou
title	The application of third party guarantee in structuring sukuk in the Islamic capital market: a preliminary literature survey
title_short	The application of third party guarantee in structuring sukuk in the Islamic capital market: a preliminary literature survey
title_full	The application of third party guarantee in structuring sukuk in the Islamic capital market: a preliminary literature survey
title_fullStr	The application of third party guarantee in structuring sukuk in the Islamic capital market: a preliminary literature survey
title_full_unstemmed	The application of third party guarantee in structuring sukuk in the Islamic capital market: a preliminary literature survey
title_sort	application of third party guarantee in structuring sukuk in the islamic capital market: a preliminary literature survey
publisher	MCSER-Mediterranean Center of Social and Educational research
publishDate	2015
url	http://irep.iium.edu.my/46894/ http://irep.iium.edu.my/46894/ http://irep.iium.edu.my/46894/ http://irep.iium.edu.my/46894/1/The_Application_of_Third_Party_Guarantee_in_Structuring_Sukuk_in_the_ICM.pdf http://irep.iium.edu.my/46894/6/46894_The_application_of_third_party_guarantee_in_structuring_sukuk_SCOPUS.pdf
first_indexed	2023-09-18T21:06:44Z
last_indexed	2023-09-18T21:06:44Z
_version_	1777410983810039808

The application of third party guarantee in structuring sukuk in the Islamic capital market: a preliminary literature survey

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