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  • The Future Of Sukuk: Substance Over Form?

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International Structured Finance Special Comment Europe, Middle East, Africa The Future of Sukuk: Substance over Form? Understanding Islamic securitisation, Asset-Backed and AAOIFI principles Author.

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Sukuk vs. Bonds and sukuk are issued to investors and may be used to raise capital for a firm. Both are considered to be safer investments than equities. Sukuk investors receive profit generated by the underlying asset on a periodic basis while bond investors receive periodic interest payments.

Smart Sukuk structure is the new generation of Sukuk issuances structures. It uses Blockchain technology to allow more investors in both retail and corporate sectors to participate in Sukuk issuances. Through this technology, all financial institutions can issue their Sukuk.

An SPV, or special purpose vehicle, is a legal entity that allows multiple investors to pool their capital and make an investment in a single company. SPVs have multiple use-cases in the business world. Public corporations sometimes use SPVs to isolate certain holdings from the parent company's balance sheet.

A special purpose vehicle is a subsidiary created by a parent company for a variety of purposes. The SPV can be used to isolate financial risk, securitize assets, and perform separate financial transactions.

A Special Purpose/Project Vehicle (SPV) is a legal entity that undertakes a project. All contractual agreements between the various parties are negotiated between themselves and the SPV.

To wrap-up the distinguishing characteristics of sukuk, we conclude that sukuk are mainly asset backed, stable income, tradable and shari'ah-compatible investment certificates having partial beneficial ownership of underlying asset.

Sukuk holders subscribe by paying an issue price to a special purpose vehicle (SPV) company. In return, the SPV issues certificates indicating the percentage they own in the SPV. The SPV uses the funds raised and purchases the asset from the obligor (seller). In return, legal ownership is passed to the SPV.

This special purpose vehicle (SPV) issues Sukuk certificates that are sold to the investors. Then the originator purchases the required asset, using the proceeds from the sale of the certificates to the investors. The SPV buys the asset from the originator. SPV pays the asset sale proceeds to the originator.

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© Copyright 1997-2025
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Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
Privacy Notice
Legal Hub
Content Takedown Policy
Bug Bounty Program
About Us
Blog
Affiliates
Contact Us
Delete My Account
Site Map
Industries
Forms in Spanish
Localized Forms
State-specific Forms
Forms Kit
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate WorkFlow
DocHub
Instapage
Social Media
Call us now toll free:
+1 833 426 79 33
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232