PUBLICATIONS - FIQH - ISRA - Paper - The Concept and Operations of Swap as a Hedging Mechanism for Islamic Financial Institutions (No 14/2010)

The Concept and Operations of Swap as a Hedging Mechanism for Islamic Financial Institutions - ISRA Research Paper (No. 14/2010)

Assoc. Prof. Dr. Asyraf Wajdi Dusuki, Head of Research Affairs Department, ISRA 

The paper discusses the concept and operations of the swap instrument as a hedging mechanism in the Islamic financial system.  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. 

The paper also outlines the Shariah parameters that need to be observed by the financial institutions offering the various swap instruments. 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 documents were also referred to, giving a wider and more thorough perspective on the issue.

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