Islamic Derivatives

The Securities Commission of Malaysia (SC) defines structured product in its Guidelines on Structured Products under para 1.03 as: 1.03 for the purposes of these guidelines: (a) The term structured product means any investment product that falls within the definition of securities under the SCA [Securities Commission Act 1993] which provides the holder with an economic, legal or other interest in another asset (underlying asset) and derives its value by reference to the price or value of the underlying asset; (b) The term underlying asset means any security, index, currency, commodity or other assets or combination of such assets. A derivative is a financial instrument whose value depends on the value of other, more basic, variables such as grains, crude oil, palm oil, currencies, or indexes.

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