Euromoney Audit Training

This 10-day interactive program features everything you need to know about Islamic finance, banking, investment, contracts, bonds, insurance, and more. All modules are individually bookable so you can choose the topics which best suit you.

Featuring 5 highly interactive workshops:

• Introduction to Islamic Finance and Banking
• Investment Funds
• Equity and Private Equity
• Islamic Contracts and Sukuk
• Takaful (Insurance)

All workshops can be booked separately.

Group discounts are available.

Course outline

The primary objective of this 10-day Islamic Finance Academy is to provide the course participants with an intensive introduction to the practice of contemporary Islamic finance and investment (commerce and finance in accordance with the principles and precepts of Islamic Shari’ah) from a transactional vantage and with particular emphasis on structuring financial transactions and products within current legal and regulatory constraints.

Islamic finance will be examined both as an application of Islamic religious law and ethics (Shari’ah) and as an effort to create and operate Shari’ah-compliant economic and finance systems (including banking transactions, capital markets transactions and investment transactions) without riba (interest) payments and receipts and based upon a compliant risk-reward paradigm that maintains expected and competitive returns for the transactional parties.

The Academy modules are designed to familiarise the participants with the issues that are encountered in a broad range of different areas of the Islamic finance and investment practice, with the types of solutions that have been developed for resolving those issues, with the methodologies that have been developed for devising those solutions, and with the sensitivities of the different transactional participants. Virtually every aspect of the Academy draws upon case studies of actual transactions.

Who should attend?

• Islamic bankers
• Corporate financiers
• Investment bankers
• Private bankers
• Corporate and commercial bankers
• Analysts
• Portfolio managers
• Investment advisors
• Consultants and lawyers
• Regulators
• Governmental representatives
• Compliance professionals
• Asset-liability managers
• Risk managers
• Treasurers
• Internal auditors
• In-house counsels
• Internal auditors
• Islamic banking professionals
• Product development professional
• Shari’ah auditors
• Shari’ah supervisory board members
• Conventional bankers and financiers offering Islamic finance services
• Fund- and asset managers
• Islamic insurers and operational staff
• Actuaries
• Financial journalists
• Private equity investors and fund managers

Days 1 - 3 Introduction to Islamic Finance and Banking

Day 1

Introduction and Background

• Introduction
• Ethical Investing
• Commonalities: Islamic and Conventional Finance
• Differences: Islamic and Conventional Finance
• Structured Finance
• Some Shari’ah Principles
• Riba, Gharrar and Maysir
• The Shari’ah as a Legal System
• Examples of Substantive Principles
• Some History
• Prior to the 1970s
• 1970s to Mid-1990s
• Modern Islamic Finance: Mid-1990s to the Present
• Five Critical Factors
• Ijma
• Nominate Contracts
• Prior to 1996
• Subsequent to 1996: Combinations and Multiple Contracts
• Dow Jones Fatwa of 1998 and the Equity Side of the Islamic Capital Markets: An Overview of the Fatwa and Its Implications.
• Sukuk and the Finance Side of the Islamic Capital Markets: An Overview.
• Bifurcated Structures: Compliant Structures In Western Markets: Introductory Overview.
• Tax, Regulatory, Credit, Underwriting and Similar Constraints.
• A Generic Ijara As An Example.
• Myth: Comparative Complexity of Shari’ah-Compliant and Equivalent Conventional Transactions.
• Current Markets: An Overview.
• The First Thirteen Years: Sukuk Issuances.

Day 2

The Shari’ah, Shari’ah Boards and Fatawa

• The Shari’ah.
• The Way or Path: Ethics, Law, Ritual, Governance and More.
• Qur’an.
• Sunna.
• Ijma’.
• Qiyas.
• The Shari’ah as a Substantive Legal System.
• Schools of Islamic Jurisprudence.
• Hanafi.
• Shafii.
• Hanbali.
• Malaiki.
• Shari’ah Supervisory Boards and Fatawa.
• A Little History.
• Roles of Shari’ah Boards.
• Composition and Construction of Shari’ah Boards.
• Fatwa as Opinion.
• Role of Fatawa in Modern Islamic Finance.
• Nature of Fatawa in Modern Islamic Finance.
• Substantive Coverages of Fatawa in Modern Islamic Finance.

Property, Contracts and Instruments: Some Basic Concepts

• Introduction to Property and Ownership Concepts.
• Introduction to Contractual Principles.
• Financial Instruments.
• Nominate Contracts.

Day 3

Islamic Banking

• Islamic Banking Models.
• Intermediation Functions.
• Two-Tiered Mudaraba Model.
• Two Windows Model.
• Wakala Model.
• Financial Intermediation.
• Basel II and Islamic Banking.
• Banking Risks.
• Risk Management Process.
• Reserves and Similar Issues.
• Profit and Loss Sharing Arrangements.
• Displaced Commercial Risk.
• Corporate Governance.
• Definitions and Increased Focus.
• Elements of Sound Corporate Governance.
• Stakeholder Orientation.
• Governance and Shari’ah Boards.
• Profit Equalisation Reserves and Governance.
• Transparency, Accountability and Disclosure.
• Risk Concepts.
• Profit Sharing Investment Accounts.
• Disclosure Issues.
• Profit Equalisation Concepts and Issues.
• Credit Risks with Islamic Financial Instruments and Structures.
• Liquidity Risks.
• Operational Risks.
• Risk Measurement and Weighting.
• Asset-Liability Gaps.
• Domestic Rates of Return and International Rates as Benchmarks.
• Risk Management Issues.
• Credit and Market Risks for Specific Instruments.
• Operational Risks for Specific Instruments.

Day 4 - Investment Funds

• Fund Structures.
• Shari’ah Supervision of Funds.
• Fixed Income Securities.
• Private Equity.
• Real Estate.
• Legal and Regulatory Issues.

Lease (Ijara) Transactions (Particularly in Real Estate, Equipment Finance and Project Finance Transactions)

• Conventional Real Estate Transactions.
• A Short History of Real Estate Investing in Islamic Finance.
• Elements of the Ijara (Lease).
• Bifurcated Structures: Generic Ijara Transactions.
• A Case Study Variation: All Cash Acquisition and Subsequent Financing (United States).
• A Case Study Variation: All Cash Acquisition, Subsequent Financing, Initial Loan Structure (United Kingdom).
• A Case Study Variation: No Puts or Calls on Real Property (Sweden).
• Single Islamic Tranche Structures: Ijara (Middle East).

Day 5 - Equity & Private Equity

Equity Investment Transactions and Private Equity Transactions

• The 1998 Dow Jones Fatwa.
• History of the Fatwa.
• Permissible and Impermissible Instruments.
• Permissible and Impermissible Business Activities.
• Permissible and Impermissible Riba: Financial Tests and Permissible Variance.
• Cleansing and Purification.
• Post-Dow Jones.
• Changes in Available Financial Information.
• Changes in Financial Tests for Indices and Equity Investments.
• Ramifications of the Tests Regarding Permissible and Impermissible Business Activities in Equity Investment Transactions.
• The Diaspora: Ramifications of the Tests Regarding Permissible and Impermissible Business Activities in Non-Equity Investment Transactions.
• Private Equity Transactions.
• Non-Controlling Investments.
• Controlling Investments.
• Private Equity: Ijara Transactional Structures.

Derivatives

• Derivatives Issues Generally.
• The Arabun (Arboon) Short Sale Equivalent.
• Tahawwut Master Agreement.
• Total Return Swaps and Similar Concepts.

Days 6-8 Islamic Contracts & Sukuk

Day 6

Murabaha Transactions

• Murabaha Defined.
• Elements of the Murabaha.
• Generic Murabaha Structures.
• Generic Syndicated Murabaha.
• Syndicated Murabaha With An Agent.
• Vector Transactions: Metals.
• Working Capital Murabaha Transactions.
• Murabaha As A Loan.
• A Case Study of a Term and Revolving.

Musharaka Transactions

• Musharaka Defined.
• Some Musharaka Principles.
• The Diminishing Musharaka Structure.
• A Case Study Involving a Term Murabaha Facility and a Revolving Murabaha Facility.

Mudaraba and Musawamma Transactions

• Mudaraba and Musawamma Defined.
• Some Mudaraba and Musawamma Principles.
• Mudaraba Structures in Islamic Banking.
• Mudaraba Structures in Takaful.

Other Transactions, Briefly Considered

• Other Sales Transactions.
• Salam.
• Arabun (Arboon).
• Agency (Wakala) Transactions.
• Amanah (trust).
• Ariya (gratuitous lending).
• Wadia (deposits).
• Jo’ala (a service for a predetermined fee or commission).
• Rahn (mortgage or pledge).
• Kifala (suretyship).
• Hawala (transfer of debt).
• Waqf (charitable trust).
• Qard al-Hassan (charitable loan).

Day 7

Cross-Collateralised Financings and Alternatives to Sukuk

• Cross-Collateralised Pool Financings.
• US Financings.
• European Financings.

Securitisations and Sukuk

• Perspective.
• Securitisations and Generic Securitisation Concepts.
• Asset Securitisations Generally.
• Conceptual Generic Transactional Structure.
• Sukuk.
• Definitional Overview.
• Sukuk Markets.
• Sukuk al-Ijara.
• Sukuk al-Mudaraba.
• Sukuk al-Musharaka.
• AAOIFI Clarification Standard (17), March 8, 2008.
• Sukuk al-Wakala.
• Legal Impediments: Enforceability and Ratings.
• Case Studies.
• Bahrain Financial Harbour Sukuk.
• Tamweel RMBS Sukuk.
• TECOM Free Zone CMBS 1 (Not a Sukuk).
• Private Commercial Sukuk al-Wakala Bel-Istithmar.
• Governmental Sukuk al-Wakula Bel-Istithmar.
• Sukuk al-Mushuraka.
• Sukuk al-Mudaraba.
• Goldman Sachs.

Day 8

Project and Infrastructure Finance

• Some History of Project Finance.
• Definitions of Project Finance.
• Risk Identification, Assessment and Allocation.
• Elements and Structures.
• Ijara Structures.
• Istisna - Ijara Structures.
• Single Islamic Tranche Ijara Structures.
• Istisna - Parallel Istisna Structures.
• Quadratic Partnerships.

Shari’ah Considerations in Bankruptcy and the First Bankruptcy

• Introduction.
• Shari’ah Principles: Iflas and Taflis.
• Evolution of Capital Structures and Markets and Implications for Bankruptcies.
• Models for Bankruptcy Systems.
• Case Study: East Cameron Oil and Gas.
• Sukuk Bankruptcy and Reorganisation.

Enforceability, Legal Considerations, Accounting and Auditing Matters

• Perspective and Topics.
• Legal Matters.
• Legal Impediments: Enforceability and Ratings.
• Shamil Bank of Bahrain v. Beximco Pharmaceuticals Ltd.
• Musawi v R E International (UK) Ltd.
• Legal Opinions.
• Formation Opinions.
• Enforceability Opinions.
• Legal Issues Pertaining to Sukuk, Particularly Regarding Legal Opinions and Ratings.
• Accounting and Auditing Matters.

Days 9 & 10 - Islamic Insurance

Introduction to Takaful and Takaful Structures

• Introduction.
• Definitions of Takaful.
• Critical Concepts.
• A Short History of Takaful and Related Insurance Concepts.
• How Takaful Works, Including the Qard al-Hasan and Takaful Operators.
• Comparison of Takaful and Conventional Insurance.
• Summary of Takaful Conditions.
• Views of Conventional Insurance.
• Prohibited Items in Takaful.
• Unique Elements of Takaful.
• Tabarru.
• Qard al-Hasan.
• Shari’ah Boards.
• Dissolution.
• Takaful Models.
• Ta’awuni Model.
• Mudaraba + Wakala Model.
• Wakala Model.
• Wakala – Waqf Model.
• Takaful Products.
• Distribution Channels, Including Bancassurance.
• Overview of the Takaful Markets.

Takaful Accounting and Investments

• Takaful Accounting Considerations.
• Takaful Investment Considerations.

Governance Matters and Takaful

• Shari’ah Boards and Governance in the Takaful Context.
• Shareholders, Policyholders, Stakeholders and the Takaful Fund.
• Capital Adequacy and the Qard al-Hasan.
• Takaful Operators.

 Re-Takaful

• Introduction.
• Definitions of Re-Takaful.
• Critical Concepts.
• A Short History of Re-Takaful and Related Insurance Concepts.
• How Re-Takaful Works, Including the Qard al-Hasan and Re-Takaful Operators.
• Re-Takaful Models.
• Ta’awuni Model.
• Mudaraba + Wakala Model.
• Wakala Model.
• Wakala – Waqf Model.

Surplus in Takaful

• Defining Surplus in Takaful.
• Different Conceptions of Surplus Sharing.
• Bankruptcy Considerations and Entitlements to Surplus.
• Surplus under Difference Takaful Models.
• A Case Study: The Case of the Missing Surplus.

 

• Michael McMillen

  Michael received his M.D. from the Albert Einstein College of Medicine, his J.D. from the University of Wisconsin Law School, and his B.B.A. from the University of Wisconsin – Madison School of Business. Michael has been a partner with major international law firms and has worked in New York, Dubai, Riyadh and London. Michael is internationally recognised for his work in Islamic finance and project finance. He publishes and speaks throughout the world on Islamic finance and project finance. He has twice been a recipient of the Euromoney award for Best Legal Advisor in Islamic Finance (2004 and 2007) and has also received the Sheikh Mohammed Bin Rashid Al-Maktoum award for Best Legal Advisor in Islamic Finance for North America. He has twice acted as Chair, and was the founding Chair, of the Islamic Law Section, a division of the International Law Section of the American Bar Association. Michael has also been active in the capital markets initiatives of the Islamic Financial Services Board, focusing on securities and capital markets laws, the use of trusts and trust concepts in capital markets transactions, and the enforceability of the Shari’ah in different jurisdictions throughout the world.

  Courses run by this instructor

  • SUKUK - Islamic Bonds and Securitisations - Dubai
  • Islamic Finance & Investment - Dubai

Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.

SUKUK - Islamic Bonds and Securitisations - Dubai

26-28 Mar 2012 (Dubai, United Arab Emirates)
1-3 Oct 2012 (Dubai, United Arab Emirates)

A 3-day practical, interactive financial training workshop looking at Sukuk and related Islamic financial products, with real life case studies.

Islamic Finance & Investment - Dubai

18-22 Mar 2012 (Dubai, United Arab Emirates)

A workshop exploring contemporary Islamic finance and investment - commerce and finance in accordance with the principles and precepts of Islamic Shari’ah - from a transactional vantage and with particular emphasis on structuring financial transactions and products.