Sukuk al-wakalah
Sukuk whose proceeds the obligor invests as agent in a portfolio of eligible assets, for an agreed fee.
Sukuk al-wakalah represent ownership of a portfolio of assets managed by the obligor as agent, the wakil, for the sukuk holders. The agent invests the proceeds in eligible assets, which may include leased assets and receivables, in return for a fee, and returns come from the portfolio's income. The structure is popular because it allows a mix of assets, though requirements on the minimum share of tangible assets vary between Shariah boards.
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.WakalahAgency: one party appoints another to act on its behalf, with or without a fee.Asset-backed and asset-based sukukThe distinction between sukuk whose holders have real recourse to the assets and those relying mainly on the obligor's promise to pay.Periodic distributionThe scheduled payment of rent or profit to sukuk holders on set dates during the life of the sukuk.