Can Unleveraged Green Investment Trusts (UGITs) promote Liquidity Management and Sustainable Development?

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Related Event : 12TH International Shari’ah Scholars Forum | ISSF2017
Date : 1st November 2017
Venue : Kuala Lumpur, Malaysia
Year : 2017


Abstract

The main purpose of this paper is to explore a liquidity management solution for Islamic financial institutions (IFIs) that concurs with sustainable development and financial stability. Our innovative solution is based on the investment trust companies’ model, i.e., a publicly tradable closed-ended fund. We analyse the Unleveraged Green Investment Trusts (UGITs) structure together with the key enabling factors, consistent with Basel III regulatory requirements. The findings allow us, first, to demonstrate how financial innovation can both meet financial stability and sustainable development objectives, therefore achieving the through spirit of Islamic finance. Second, we highlight the importance of regulatory and fiscal frameworks to enhance the liquidity and investor appeal for green financial instruments.

 

Keywords: Investment Trusts, Green Energy, Liquidity Management, Maqasid al-Shari’ah

 

 

                            Dalal Aassouli1       M. Shahid Ebrahim2   Rohaida Basiruddin3   

 

 

 

 

 

1Corresponding Author: Visiting Academic at Durham Centre for Islamic Economics and Finance. University of Durham, Durham University Business School, Durham DH1 5FS, Uk; dalal.aassouli@gmail.com. Phone number +44 7904 082182

2Professor of Islamic Finance. University of Durham, Durham University Business School, Mill Hill Lane, Durham, England DH1 5FS, United Kingdom; m.s.ebrahim@durham.ac.uk

3Senior Lecturer. Universiti Teknologi Malaysia., Azman Hashim International Business School, Jln Sultan Yahya Petra, 54100 Kuala Lumpur, Malaysia; rohaida@ibs.utm.my


 

 

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