A guide to Practical Law Finance's Islamic finance resources.
Introduction
This note acts as a guide to PLC Finance's resources on Islamic finance.
Islamic finance overview
For an introduction to the basic principles of Islamic law (or Sharia) that affect finance transactions and an overview of the differences between Sharia and conventional finance, see Practice note, Islamic finance: UK law overview.
For a description of the main Sharia-compliant transaction structures together with an explanation of how they are used in practice (giving a brief outline of some of the documents used), see Practice note, Islamic finance: Transaction structures
Sukuk (singular sakk) are financial instruments, such as certificates, which represent an undivided ownership share in an underlying asset or interest held by the issuer. This distinguishes them from both conventional bonds (which represent debt obligations of the issuer) and conventional equities (which represent ownership interests in the issuer itself). The basic principle is that an ownership share in the underlying asset entitles the sakk holder to a proportionate share of the returns generated by the asset. The overall economic effect is similar to a conventional bond.
For an overview of the key issues surrounding Sharia compliant financing of commercial real estate, considering both asset based and asset backed structures and how best to combine conventional and Sharia compliant financing, see Practice note, Sharia compliant financing of commercial real estate
Islamic ESG finance
For an overview of how Islamic finance is adopting ESG standards to produce hybrid Sharia-compliant ESG products, in particular Green Sukuk, see ESG finance and Islamic finance.
For an introduction to some of the issues surrounding the development of Islamic derivatives and an outline of some of the key structures, see Article, Islamic derivatives.
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