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Islamic embedded options in structured products of Malaysia: issues and challenges

Structured Products could be defined as savings or investment products in which the return is linked to an underlying asset with predefined features such as the maturity date, coupon date, capital protection level (SMR Wealth Management). Islamic structured products are essentially Shariah-compli...

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Main Authors: Nik Hazimi, Mohammed Foziah, Tawfik, Azrak
Format: Article
Language:English
Published: 2020
Subjects:
BP Islam. Bahaism. Theosophy, etc
HG Finance
Online Access:http://eprints.unisza.edu.my/6952/1/FH02-FPP-20-38977.pdf
http://eprints.unisza.edu.my/6952/
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spelling my-unisza-ir.69522022-04-24T03:12:01Z http://eprints.unisza.edu.my/6952/ Islamic embedded options in structured products of Malaysia: issues and challenges Nik Hazimi, Mohammed Foziah Tawfik, Azrak BP Islam. Bahaism. Theosophy, etc HG Finance Structured Products could be defined as savings or investment products in which the return is linked to an underlying asset with predefined features such as the maturity date, coupon date, capital protection level (SMR Wealth Management). Islamic structured products are essentially Shariah-compliant structured products. They bear similarities to conventional products in terms of purpose, economic benefits and basic structural features. The difference being that Islamic structured products adhere to Shariah principles by avoiding riba (usury), gharar (uncertainty), zulm (injustice), and operate holistically in a Shariah-compliant manner. This includes utilizing Shariah contracts approved by the Shariah Advisory Council of the Central Bank of Malaysia to structure the investment and contains underlying assets that are permissible by Shariah. Despite having been introduced into the industry since its establishment, implementing Islamic structured products have many Shariah issues. Using in-depth analyses of both the literature and several case studies for structured products in Islamic banks in Malaysia, this paper analyzes and assesses the most important Shariah issues surrounding Islamic structured products in Malaysia. Our findings confirm that the current implementation of Malaysian structured products continues to possess a number of Shariah issues, which need to be corrected by both the banks and the industry in order to have fully Shariah-compliant structured products to be operational in the market. 2020-06 Article PeerReviewed text en http://eprints.unisza.edu.my/6952/1/FH02-FPP-20-38977.pdf Nik Hazimi, Mohammed Foziah and Tawfik, Azrak (2020) Islamic embedded options in structured products of Malaysia: issues and challenges. Journal of Islamic Economics and Finance, 6 (1). pp. 107-129. ISSN 2149-3820
institution Universiti Sultan Zainal Abidin
building UNISZA Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Sultan Zainal Abidin
content_source UNISZA Institutional Repository
url_provider https://eprints.unisza.edu.my/
language English
topic BP Islam. Bahaism. Theosophy, etc
HG Finance
spellingShingle BP Islam. Bahaism. Theosophy, etc
HG Finance
Nik Hazimi, Mohammed Foziah
Tawfik, Azrak
Islamic embedded options in structured products of Malaysia: issues and challenges
description Structured Products could be defined as savings or investment products in which the return is linked to an underlying asset with predefined features such as the maturity date, coupon date, capital protection level (SMR Wealth Management). Islamic structured products are essentially Shariah-compliant structured products. They bear similarities to conventional products in terms of purpose, economic benefits and basic structural features. The difference being that Islamic structured products adhere to Shariah principles by avoiding riba (usury), gharar (uncertainty), zulm (injustice), and operate holistically in a Shariah-compliant manner. This includes utilizing Shariah contracts approved by the Shariah Advisory Council of the Central Bank of Malaysia to structure the investment and contains underlying assets that are permissible by Shariah. Despite having been introduced into the industry since its establishment, implementing Islamic structured products have many Shariah issues. Using in-depth analyses of both the literature and several case studies for structured products in Islamic banks in Malaysia, this paper analyzes and assesses the most important Shariah issues surrounding Islamic structured products in Malaysia. Our findings confirm that the current implementation of Malaysian structured products continues to possess a number of Shariah issues, which need to be corrected by both the banks and the industry in order to have fully Shariah-compliant structured products to be operational in the market.
format Article
author Nik Hazimi, Mohammed Foziah
Tawfik, Azrak
author_facet Nik Hazimi, Mohammed Foziah
Tawfik, Azrak
author_sort Nik Hazimi, Mohammed Foziah
title Islamic embedded options in structured products of Malaysia: issues and challenges
title_short Islamic embedded options in structured products of Malaysia: issues and challenges
title_full Islamic embedded options in structured products of Malaysia: issues and challenges
title_fullStr Islamic embedded options in structured products of Malaysia: issues and challenges
title_full_unstemmed Islamic embedded options in structured products of Malaysia: issues and challenges
title_sort islamic embedded options in structured products of malaysia: issues and challenges
publishDate 2020
url http://eprints.unisza.edu.my/6952/1/FH02-FPP-20-38977.pdf
http://eprints.unisza.edu.my/6952/
_version_ 1734304587380162560
score 13.211869

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