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Research & Articles

September 21, 2019

Shariah Compliant Pensions Simplified – part 2

NOTE: This information should not be regarded as financial advice and is merely a learning and awareness initiative.   Islam is a holistic framework with principles and guidelines for all facets of life such as worship, social relationships, business, investing and more. The laws governing investments are underpinned by an overarching principle of encouraging beneficial...
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August 16, 2019

Shariah Compliant Pensions Simplified – Part 1

Part 1: Introduction to Pensions   NOTE: This information should not be regarded as financial advice and is merely a learning and awareness initiative. Introduction All eligible Muslim workers will be auto-enrolled into a pension scheme or opted out for whatever personal reason. Pensions are now inherent to employment and work life. However, many Muslims...
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March 13, 2019

Research Paper: Shariah Analysis of Hedge Funds

Hedging involves reducing overall risk by taking on an asset position that offsets an existing source of risk. Its strategies encompass a broad range of risk tolerance and investments, such as but not limited to, debt and equity securities, commodities, currencies, derivatives, and real estate vehicles. The most widely used equity longshort strategy involves simultaneously...
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March 11, 2019

Research Paper: Commodity and Equity Swaps

Commodity swaps and equity swaps are financial derivatives. In commodity swaps, exchanged cash flows are dependent on the price (floating/market/ spot) of an underlying commodity. A commodity swap allows a customer to secure a maximum price for a commodity in lieu of a fixed amount. In return, he/she gets payments based on the market price...
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August 22, 2018

Research Paper: Retail Forex Trading: Views from the front lines of Islamic Finance

Foreign exchange trading has been one of the fastest-growing activities among private investors in the past 15 years. According to research by Citi in 2014, 4 million people are now trading currencies online, and retail traders account for around 20 per cent of the average daily turnover of the global spot forex market. An estimated...
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May 28, 2018

Research Paper: Decoding Compliance of Initial Coin Offerings

Initial Coin Offerings are an innovative way to raise funds by issuing tokens through blockchain technology. The issued tokens can vary widely in their design and function. Some of the common types of tokens include: work tokens, utility tokens, asset-backed tokens, revenue tokens, equity tokens, buy-back tokens. In theory, a token holder can gain a...
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May 28, 2018

Research Paper: The Shariah Factor in Cryptocurrencies and Tokens

Cryptocurrencies have become a buzzword across the world. The potential financial returns from cryptocurrencies have attracted Muslim investors, whilst the opportunity to raise funds by issuing tokens has attracted Muslim entrepreneurs and developers. The key question which is continuously being asked is the Shariah compliance of cryptocurrencies and token sales. This research analyses the nature...
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May 18, 2018

Zakat on share investments: determining a proxy for calculation

At the National Zakat Foundation, in collaboration with scholars, financial analysts, accountants and others, we spent almost 5 months analysing the FTSE 100 to determine proxy for net Zakatable assets in companies,  Summary recommendations National Zakat Foundation’s (NZF) recommendation to Muslim shareholders is as follows: Ideally, a complete calculation and review of the balance sheet...
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May 17, 2018

Research paper: Zakat on Cryptocurrencies

Summary Any cryptocurrency or token purchased to resell will always be Zakatable. Zakat is due on the market value on one’s Zakat anniversary. The cryptocurrency value should be converted into one’s local currency at the time of calculation. If a cryptocurrency is not purchased to resell, a coin currency such as Bitcoin, Litecoin, Ripple etc...
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