Research & Articles

How Smart are Smart Contracts from a Shariah Compliance Perspective?

With the rise of FinTech, we have all heard of various buzzwords and promises of revolution. One of the most common words referenced is blockchain. Another term which is beginning to gain traction is smart contracts. Whilst the actual use cases and implementation of smart contracts are still questionable and unsettled, it is no doubt...
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Zakat on Pensions – Determining a Proxy

This report outlines the juristic precedence in determining proxies for the Zakatable assets held in pension funds as well as the findings and the recommendations for Muslim pension fund members in the United Kingdom for calculating their Zakat liability. A four-month project in determining reasonable proxies for the various types of pension funds was undertaken...
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The 4 Shariah Wisdoms in Rahn (collateral)

In essence, Rahn is collateral which is any property or asset used to secure a debt. For example, a home purchase is typically secured by pledging the home as collateral. If the borrower defaults, the financier can seize the property. But why did the Shariah allow for Rahn? What are the Shariah wisdoms tied to...
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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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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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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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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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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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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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