Islamic Derivatives

The pioneer in innovative Islamic financing solutions across the globe

Our Islamic derivatives experts are consistently called upon by the world's leading financial institutions and regulators to develop and advise on ground breaking Shari'a compliant risk management products.

We are at the cutting edge of drafting and structuring Islamic hedging transactions and are at the forefront of developing and pioneering innovative structures that use traditional Islamic products like the murabaha, wa'ad, salam and arbun to generate similar economic profiles to conventional derivatives but in a Shari'a compliant manner.

ISDA-IIFM Ta'hawwut Master Agreement: we are lead counsel and law firm responsible for drafting the ISDA-IIFM Ta'hawwut Master Agreement (TMA) and have recently advised ISDA and IIFM, including the IIFM Scholars, to prepare and finalise the Profit Rate Swap Confirmation templates for use with the TMA. Furthermore, we have prepared and circulated drafts of Cross Currency Swaps Confirmation templates for use with the TMA for market comment. We were also counsel to IIFM for the development of the Master Agreement for Treasury Placement. Examples of key transactions:
JPMorgan swap: advising JPMorgan on a collateralised Islamic total return swap with sukuk as the underlying asset. The total return swap incorporated profit rate swap and credit default swap features and settlement mechanics and used wa'ad and murabaha structures.
Advising Axis on the largest Shari'a compliant swap carried out in Asia including a fx and profit rate swap.

Islamic structured products

We successfully merged Islamic finance principles with "derivative based" capital market products by developing Islamic structured products whereby holders of sukuk certificates receive pay-offs linked to underlying stocks or indices, thereby mirroring the economic effect of derivative bond transactions. We have also advised our clients on other possible structures for Shari'a compliant derivative products.

Some of our recent experience includes:

Advising Emirates Islamic Bank PJSC (EIB) in relation to structuring an innovative, Shari'a compliant SME and retail customer financing platform through the issuance of structured trust certificates.
Advising Deutsche Bank on structuring and documenting Islamic EquityBuilder Certificates™, an Islamic wealth management product structured to permit Islamic investors to invest in Shari'a compliant certificates listed on the Frankfurt stock exchange with pay-offs linked to the performance of an underlying stock, index or securities.
Advising HSBC and Morgan Stanley in connection with the documentation of their respective Shari'a compliant certificates with payoffs linked to the performance of an underlying stock, index or securities.

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