---
title: "What is Special purpose vehicle (SPV)? | IslamicOpenFinance™"
description: "A legal entity set up only for a specific transaction, such as holding sukuk assets for the holders, and kept apart from the originator."
url: https://islamicopenfinance.com/glossary/special-purpose-vehicle/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Sukuk and capital markets](https://islamicopenfinance.com/glossary/#sukuk)

Sukuk and capital markets

# Special purpose vehicle (SPV)

A legal entity set up only for a specific transaction, such as holding sukuk assets for the holders, and kept apart from the originator.

A special purpose vehicle, or special-purpose entity, is a legal entity created solely for a particular financial transaction or series of transactions. The IFSB's capital adequacy standard says it may take the form of a limited partnership, limited liability company, trust, corporation or fund, that in sukuk it typically holds the assets on behalf of the holders, for example as their agent, and that it should be bankruptcy-remote from the originator. An operating company with other assets and liabilities is not suitable for this role, because its other creditors could interfere with the holders' rights.

## Sources

- [IFSB-23 Revised Capital Adequacy Standard (Banking Segment), 2021: Special-Purpose Entity, paragraphs on the SPE in sukuk](https://www.ifsb.org/wp-content/uploads/2023/10/IFSB-23_En.pdf)

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

## Related terms

[**Sukuk** Certificates of equal value representing undivided shares in the ownership of assets, usufruct, services or a project.](https://islamicopenfinance.com/glossary/sukuk/) [**Sukuk al-ijarah** Sukuk whose holders own leased assets and receive the rent paid by the lessee as their return.](https://islamicopenfinance.com/glossary/sukuk-al-ijarah/) [**Asset-backed and asset-based sukuk** The distinction between sukuk whose holders have real recourse to the assets and those relying mainly on the obligor's promise to pay.](https://islamicopenfinance.com/glossary/asset-backed-sukuk/) [**Purchase undertaking** A unilateral promise by the originator or obligor to buy the sukuk assets from the holders at maturity or on default.](https://islamicopenfinance.com/glossary/purchase-undertaking/) [**Investment trustee (sukuk)** The intermediary that protects sukuk holders' interests, supervises the issue manager and keeps documents and guarantees safe.](https://islamicopenfinance.com/glossary/investment-trustee/)

**Sukuk and capital markets**

1. [Sukuk](https://islamicopenfinance.com/glossary/sukuk/)
2. [Sukuk al-ijarah](https://islamicopenfinance.com/glossary/sukuk-al-ijarah/)
3. [Sukuk al-musharakah](https://islamicopenfinance.com/glossary/sukuk-al-musharakah/)
4. [Sukuk al-mudarabah](https://islamicopenfinance.com/glossary/sukuk-al-mudarabah/)
5. [Sukuk al-wakalah](https://islamicopenfinance.com/glossary/sukuk-al-wakalah/)
6. [Periodic distribution](https://islamicopenfinance.com/glossary/periodic-distribution/)
7. [Islamic collective investment scheme](https://islamicopenfinance.com/glossary/islamic-collective-investment-scheme/)
8. [Shariah screening](https://islamicopenfinance.com/glossary/shariah-screening/)

[All 221 terms](https://islamicopenfinance.com/glossary/)