Shariah issues in Islamic capital markets : Sukuk

الملخص EN

The purpose of this paper is to ascertain the prevailing Shariah issues in Islamic capital markets, particularly Sukuk.

Common features of conventional bonds are replicated in Sukuk via late penalty payment upon default, trading of debt-based sukuk, purchase undertaking in equity-based structures and ownership status in assetbased transactions.

These features pose Shariah concerns and are discussed in the paper from the perspective of current practices and views of scholars by compiling various references that reveal the diversity of the Shariah.

The paper does not claim to provide solutions to the issues of debate; rather it engages in providing an analysis of these Shariah issues.

The four issues covered are certainly not exhaustive; more issues are expected to creep up as sukuk structures continue to evolve over time.

The paper provides value by shedding light upon the discussed issues and it also highlights the need for a balance between growing the sukuk market and upholding Shariah in all aspects when structuring sukuk.