IslamicFinance.de

"THE CONCEPT AND OPERATIONS OF SWAP AS A HEDGING MECHANISM FOR ISLAMIC FINANCIAL INSTITUTIONS"

The main objective of this paper is to give a clearer picture of the swap mechanism as offered by the international Islamic financial institutions and how its operations are structured in accordance with Shariah principles and contracts. In preparing this paper, ISRA has held a series of internal discussions as well as with outside parties, including Shariah experts and operating officers from international banks directly involved in the structuring of Shariah-compliant swap products. Documents related to the products and related academic materials were also referred to, giving a wider and thorough perspective on the issue.

by

Assoc. Prof. Dr. Asyraf Wajdi Dusuki
Head of Research Affairs Department
International Shari’ah Research Academy for Islamic Finance (ISRA)

Shabnam Mokhtar
Researcher
International Shari’ah Research Academy for Islamic Finance (ISRA)

Download: http://www.isra.my/media-centre/downloads/summary/29/216.html

Press Release

European Finance House Offshore Sharia Fund Assigned 'AAf/S1+' Fund Credit Quality
And Volatility Ratings

LONDON, May 4, 2010--Standard & Poor's Ratings Services said today that it assigned
its 'AAf' fund credit quality and its 'S1+' fund volatility ratings to EFH Funds SCA
SICAV-SIF - Liquidity Subfund (the "subfund"), a Luxembourg-domiciled U.S
dollar-denominated liquidity fund, managed by European Finance House (EFH). This is
the first Standard & Poor's fund credit quality and fund volatility rating assigned
to an offshore Islamic fund.

Fund credit quality ratings generally reflect our assessment of the level of
protection against losses from credit defaults and are based on an analysis of the
credit quality of the portfolio investments and the likelihood of counterparty
defaults.

Fund volatility ratings generally reflect Standard & Poor's view of the fund's
sensitivity to interest rate movements, credit risk, investment diversification or
concentration, liquidity, leverage, and other factors.

The ratings reflect Standard & Poor's analysis of the subfund's credit quality and

Press Release

Islamic Investors' Risk Tolerance Will Determine Demand For Sharia Fund Ratings,
Report Says

LONDON, May 4, 2010--The economic boom in the Gulf Cooperation Council (GCC) region
has fueled the emergence of Islamic finance in the international market in the past
decade. Revenue growth in this region has particularly benefited the asset
management sector, as Standard & Poor's noted in a report published today (see "Using Fund Ratings To Assess Credit And Market Risks In Sharia Funds").

The Middle East is by far the largest market for Sharia-compliant funds, but
conventional players in Europe, South Africa, and the U.S. have also launched a
number of funds that comply with Sharia law during past years, enhancing their
product range to meet the specific requirements of Islamic investors seeking to
invest in this asset class.

The number of product types remains limited, which Standard & Poor's Ratings
Services believes is largely due to the nascent nature of Sharia funds. Funds also
have to be invested in ways that are permitted under Islamic law. Sharia funds,
unlike traditional bond funds, do not invest in conventional rated fixed-income