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

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building INTELEK Repository
caption Diversification
collection Online Access
collectionurl https://intelek.unisza.edu.my/intelek/pages/search.php?search=!collection407072
date 2020-07-09 15:41:30
format Restricted Document
id 12645
institution UniSZA
originalfilename 6952-01-FH02-FPP-20-38977.pdf
person RN and YD
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resourceurl https://intelek.unisza.edu.my/intelek/pages/view.php?ref=12645
spelling 12645 https://intelek.unisza.edu.my/intelek/pages/view.php?ref=12645 https://intelek.unisza.edu.my/intelek/pages/search.php?search=!collection407072 Restricted Document Article Journal application/pdf 22 1.6 Adobe Acrobat Pro DC 20 Paper Capture Plug-in RN and YD 2020-07-09 15:41:30 Diversification Gold Diversification 6952-01-FH02-FPP-20-38977.pdf UniSZA Private Access Islamic embedded options in structured products of Malaysia: issues and challenges Journal of Islamic Economics and 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. 6 1 107-129
spellingShingle Islamic embedded options in structured products of Malaysia: issues and challenges
subject Diversification
summary 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.
title 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_short Islamic embedded options in structured products of Malaysia: issues and challenges
title_sort islamic embedded options in structured products of malaysia: issues and challenges