THE USE OF TRUST IN WAQF AND SUKUK (ISRA-TR REPORT 2016)

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Year: 2016


Islamic financial institutions have attempted to provide as wide a range of products and instruments as their conventional counterparts while ensuring that what is offered is Shariah-compliant. This has proved an enormous challenge, but the successful innovation of new Islamic financial products and instruments demonstrates the exibility of Islamic commercial law.

While taking account of this wider context the approach here is focused on the Shariah concept of waqf of which the English common law equivalent is a trust. Trusts are very versatile contracts recognized both in English common law and Shariah. They are an essential component of many modern Islamic financial instruments, indeed a trust law (or its equivalent alternative as used in certain civil law jurisdictions) is a pre-requisite for sukuk issuance. Waqf structures can be used for trusts under English common law, but these are applicable to charitable foundations, and not used for commercial transactions.

 

Source:

ISRA THOMSON REUTERS ISLAMIC COMMERCIAL LAW REPORT 2016 (Pg 157 - 158) 


 

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