Sukuk and capital markets

Sukuk of usufruct (sukuk al-manfa'ah)

Certificates representing ownership of the right to use an asset, or of services, rather than the asset itself.

Sukuk of usufruct are certificates of equal value that represent ownership of the right to use an asset, or of services from a specified or described provider, rather than ownership of the asset itself. AAOIFI's investment sukuk standard covers usufruct of existing assets, usufruct of described future assets and services, and it does not permit trading usufruct certificates of a described asset until the asset has been identified, except under the rules for disposal of receivables. Holders earn the rentals or fees that the usufruct produces when it is leased or provided onward.

Sources

AAOIFI Shari'ah Standards, English edition (full text, PDF): Shari'ah Standard No. 17, Investment Sukuk, items 3/2 and 5/2/8

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

SukukCertificates of equal value representing undivided shares in the ownership of assets, usufruct, services or a project.Sukuk al-ijarahSukuk whose holders own leased assets and receive the rent paid by the lessee as their return.Sub-lease (ijarah from a lessee)A lease granted by a lessee to a third party over the usufruct it holds, unless the owner has prohibited it.Ijarah mawsufah fi al-dhimmah (forward lease)A forward lease of an asset described by specifications, with use starting on a future date once it is delivered.