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Islamic Finance Academy

Euromoney Learning
Course summary
Length: 12 days
Price: 6,995 GBP excl. VAT
Location: Dubai
Course type: Open / Scheduled

Course description

Course description

Islamic Finance Academy

This programme of courses is made up of 6 individually bookable modules:

  • Module 1: Introduction to Islamic Finance & Banking
  • Module 2: Islamic Banking including Retail Products
  • Module 3: Leasing, Musharaka, Mudaraba and Sukuk
  • Module 4: Equity Investing, Private Equity and Islamic Contracts
  • Module 5: Investment Finance and Project Finance
  • Module 6: Takaful

This 10-day interactive program features everything you need to know about Islamic finance, banking, investment, contracts, bonds, insurance, and more. All modules are individually bookable so you can choose the topics which best suit you.

Group discounts are available.

Course outline

The primary objective of this 10-day Islamic Finance Academy is to provide the course participants with an intensive introduction to the practice of contemporary Islamic finance and investment (commerce and finance in accordance with the principles and precepts of Islamic Shari’ah) from a transactional vantage and with particular emphasis on structuring financial transactions and products within current legal and regulatory constraints.

Islamic finance will be examined both as an application of Islamic religious law and ethics (Shari’ah) and as an effort to create and operate Shari’ah-compliant economic and finance systems (including banking transactions, capital markets transactions and investment transactions) without riba (interest) payments and receipts and based upon a compliant risk-reward paradigm that maintains expected and competitive returns for the transactional parties.

The Academy modules are designed to familiarise the participants with the issues that are encountered in a broad range of different areas of the Islamic finance and investment practice, with the types of solutions that have been developed for resolving those issues, with the methodologies that have been developed for devising those solutions, and with the sensitivities of the different transactional participants. Virtually every aspect of the Academy draws upon case studies of actual transactions.

Training Course Content

Day 1

Introduction to Islamic finance and banking
Introduction and background

  • Introduction
  • Ethical investing
  • Commonalities: Islamic and conventional finance
  • Differences: Islamic and conventional finance
  • Structured finance
  • Some Shari’ah principles
  • Riba, Gharrar and Maysir
  • The Shari’ah as a legal system
  • Examples of substantive principles
  • Some history
  • Prior to the 1970s
  • 1970s to mid-1990s
  • Modern Islamic finance: mid-1990s to the present
  • Five critical factors
  • Ijma
  • Nominate contracts
  • Prior to 1996
  • Subsequent to 1996: combinations and multiple contracts
  • Dow Jones Fatwa of 1998 and the equity side of the Islamic capital markets: an overview of the fatwa and its implications
  • Sukuk and the finance side of the Islamic capital markets: an overview


Day 2
Introduction to Islamic finance and banking

  • Bifurcated structures: compliant structures in western markets: introductory overview
  • Tax, regulatory, credit, underwriting and similar constraints
  • A generic ijara as an example
  • Myth: comparative complexity of shari’ah-compliant and equivalent conventional transaction
    - Current markets: an overview
    - The first decade: Sukuk issuance
  • Introduction to Islamic Banking
    - Three banking models
    - Two-tiered mudaraba
    - Two windows
    - Wakala
  • Enforceability and legal considerations
    - Perspective and topics
    - Legal mpediments
    - Shamil bank of Bahrain v Beximco pharmaceuticals
    - Musawi v R E international (UK) limited
    - Blom developments bank v the Investment dar company
    - Formation opinions
    - Enforceability opinions
    - Legal issues pertaining to sukuk
    - Ratings matters


Day 3

Islamic banking, including retail products

  • Islamic banking models
    - Three banking models
    - Two-tiered mudaraba
    - Two windows
    - Wakala
  • Financial intermediation
    - Asset transformation
    - Administration of payments systems
    - Brokerage
    - Risk transformation
  • Basel II and Islamic banking
  • Capital adequacy, risk management and corporate governance
  • Risk categorisation
    - Financial
    - Operational
    - Business
    - Event
  • Reserves
  • Analytical tools
  • Corporate governance
    - Defined
    - Elements
    - Stakeholder view
    - Profit equalisation reserves
    - Transparency, accountability and disclosure
  • Risk concepts
    - Profit equalisation and investment risk reserves
    - Sales-based contracts and credit risk
    - Credit risk measurement and provisioning
    - Liquidity risk
    - Risk management
  • Credit and market risks
  • Operational risks
  • Sources of funds for an Islamic bank
    - Savings and current deposits
    - Qard Hassan
    - Wadi’a Yad Dhamanah
    - Mudaraba
    - Term deposits
    - Mudaraba
    - Wakala
    - Investment deposits
    - Mudaraba
    - Wakala
  • Home purchase financing structures
    - Leases (Ijara)
    - Diminishing musharaka
    - Deferred payment sale (Malaysia)
    - Construction sale
  • Automobile financing
    - Lease (Ijara) structures
  • Personal financing
    - Rahn
    - Tawarruq
    - Bay al-Inah (Malaysia)
  • Islamic credit cards
    - Ujrah-based structures
    - Inah-based structures (Malaysia)
    - Tawarruq structures

Day 4
Leasing, musharaka, mudaraba and sukuk

  • Leasing (Ijara) transactions: particularly real estate, equipment finance and project and infrastructure finance
    - Conventional real estate transactions – a short history of real estate investing in Islamic Finance
    - Elements of the ijara (lease)
    - Bifurcated structures: generic ijara transactions

A Case Study Variation:All Cash Acquisition and Subsequent Financing (United States)
A Case Study Variation:All Cash Acquisition, Subsequent Financing, Initial Loan Structure (United Kingdom)
A Case Study Variation:No Puts or Calls on Real Property (Sweden)

  • Murabaha, tawarruq and musawamma
    - Murabaha, tawarruq and musawamma defined
    - Some murabaha and musawamma principles
    - Generic murabaha structures
    - Generic syndicated murabaha
    - Syndicated murabaha with an agent
    - Working capital murabaha transactions

Case Study:term and revolving urabahas

Day 5
Leasing, musharaka, mudaraba and sukuk

  • Musharaka
    - Musharaka defined
    - Some musharaka principles
    - The diminishing musharaka structure
  • Mudaraba
    - Mudaraba defined
    - Some mudaraba principles
    - Mudaraba structures in finance
    - Mudaraba structures in Islamic banking
    - Mudaraba structures in takaful
  • Sukuk
    - Cross collateralised pool financings
    - Europe
    - United States
    - Perspective
    - Asset securitisations generally
    - Conceptual transactional structure
    - Sukuk defined
    - AAOIFI considerations and categories
    - Sukuk markets
    - Sukuk al-Ijara
    - Sukuk al-Mudaraba
    - Sukuk al-Musharaka
    - Sukuk al-Murabaha
    - Sukuk al-Wakala
    - AAOIFI clarification of standard (17): March 2008
    - Legal impediments to enforceability and ratings

Case Studies

  • Bahrain financial harbour sukuk
  • Tamweel RMBS Sukuk
  • TECOM free zone CMBS
  • Private commercial Sukuk al- Wakala bel-Istithmar
  • Government Sukuk al-Wakala bel-Istithmar
  • Sukuk al-Musharaka
  • Sukuk al-Mudaraba
  • Goldman Sachs



Day 6
Equity investing, private equity and Islamic contracts
Equity investment transactions

  • The 1998 Dow Jones Fatwa – history of the Fatwa
  • Restrictions imposed by balance sheet information
  • Permissible and impermissible instruments
  • Permissible and impermissible business activities
  • Permissible and impermissible riba: financial tests and permissible variance
  • Cleansing and purification – post-Dow Jones
  • Changes in available financial information
  • Changes in financial tests for indices and equity investments
  • Ramifications of the tests regarding permissible and impermissible business activities in equity investment transactions
  • The diaspora: ramifications of the tests regarding permissible and impermissible business activities in non-equity investment transactions
  • Private equity
    - Some background and history
    - Some principles of private equity
    - Leasing structures
    - Murabaha structures

Day 7

Equity investing, private equity and Islamic contracts

  • Operating statement tests
    - Evolution of financial disclosure
    - Availability of operating statements
    - Adjustments to the Dow Jones tests for operating statement information
    - Variance in operating statement tests
  • AAOIFI standard 21
    - Acquisitions and investments
    - Total asset measurements
    - Purification and cleansing
  • Hybrid tests
    - FTSE bursa Malaysia shariah index three-part test
  • Islamic contracts and transactions
    - Other sales transactions
    - Salam
    - Arabun (arboon)
    - Agency (wakala)
    - Amanah (trust)
    - Ariya (gratuitous lending)
    - Wadia (deposits)
    - Rahn (mortgage and pledge)
    - Kifala (suretyship)

Day 8
Investment funds and project finance

  • Investment funds
    - Fund structures
    - Shari`ah supervision of funds
    - Real estate
    - Private equity
    - Legal and regulatory issues
    - Musings on distressed debt, fixed income and other funds
  • Project finance
    - Some history of project finance
    - Definitions of project finance
    - Risk identification, assessment and allocation
    - Elements and structures
    - Ijara structures
    - Istisna – ijara structures
    - Single Islamic tranche ijara structures
    - Istisna – parallel istisna structures
    - Quadratic partnerships


Days 9 & 10
Takaful (Islamic insurance)

Introduction to takaful and takaful structures

  • Introduction
  • Definitions of takaful
  • Critical concepts
  • A short history of takaful and related insurance concepts
  • How takaful works, including the qard al-Hasan and takaful operators
  • Comparison of takaful and conventional insurance
  • Summary of takaful conditions
  • Views of conventional insurance
  • Prohibited items in takaful
  • Unique elements of takaful
  • Tabarru
  • Qard al-Hasan
  • Shari’ah boards
  • Dissolution
  • Takaful models
  • Ta’awuni model
  • Mudaraba + wakala Model
  • Wakala Model
  • Wakala – waqf model
  • Takaful products
  • Distribution channels, including bancassurance
  • Overview of the takaful markets


Takaful accounting and investments

  • Takaful accounting considerations
  • Takaful investment considerations


Governance matters and takaful

  • Shari’ah boards and governance in the takaful context
  • Shareholders, policyholders, stakeholders and the takaful fund
  • Capital adequacy and the qard al-Hasan
  • Takaful operators


Re-takaful

  • Introduction
  • Definitions of re-takaful
  • Critical concepts
  • A short history of re-takaful and related insurance concepts
  • How re-takaful works, including the qard al-Hasan and re-takaful operators
  • Re-takaful models
  • Ta’awuni model
  • Mudaraba and wakala model
  • Wakala model
  • Wakala – waqf model


Surplus in takaful

  • Defining surplus in takaful.
  • Different conceptions of surplus sharing
  • Bankruptcy considerations and entitlements to surplus
  • Surplus under difference takaful model


Case Study:The case of the missing surplus
Course summary and close

Expenses

The cost of this course may vary by location. See above or request information for prices.

IN-HOUSE TRAINING

Euromoney Financial also delivers in-house training for finance teams and departments, giving companies the opportunity to save up to 50% on training costs.

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Euromoney Learning

Euromoney Learning

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