PUBLICATIONS - A new approach to derivatives : financial engineering with Islamic Rules (Atila Yanpar - SPK)

A NEW APPROACH TO DERIVATIVES: FINANCIAL ENGINEERING WITH ISLAMIC RULES

ATİLA YANPAR

Capital Markets Board of Turkey, Expert

Despite their importance in financial sector development, derivatives are still not generally accepted as legitimate products in Islamic finance. Conventional derivatives and the world of Islamic financial products has chasm between each other as they have different approaches in important issues like interest and ambiguity. While recent events in the world economy have sparked a global debate on derivatives and the damage caused by them, strict Sharia rules saved Islamic finance institutions from the worst of the crisis. On the other hand, due to lack of sufficient instruments for protection against volatility in currency, interest rate and commodity prices, the ability of Islamic finance institutions to survive future shocks is in question. As the Islamic banks are struggling to develop hedging tools with regard to doubt on their usage casted by religious differences, this article explores the validity of derivatives in accordance with basic legal principles of the Sharia and summarizes the key objections of scholars that challenge the permissibility of derivatives under Islamic law. In conclusion, the article delivers suggestions for Sharia compliance of derivatives and Turkish Derivatives Exchange future contracts. (access here)

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. 

LEGAL - TAHAWWUT MASTER AGREEMENT - ISDA - Islamic derivatives slow to catch on in Gulf states

DUBAI: Islamic derivatives are still struggling to gain traction in the Gulf, six months after the launch of a much-touted over-the-counter contract aimed at creating a standard legal framework for hedging products.

Experts said the contract, known as the Tahawwut Master Agreement, in theory provides Islamic institutions with a simpler template for risk management that has been approved by syariah scholars.