Sukuk
Certificates of equal value representing undivided shares in the ownership of assets, usufruct, services or a project.
Sukuk are certificates of equal value representing undivided shares in the ownership of tangible assets, usufructs and services, or in the assets of particular projects or investment activities, as IFSB-21 defines them. Holders' returns come from the underlying assets or business rather than from interest on a debt. AAOIFI's Shariah standard on investment sukuk and the IFSB's capital market principles are the main international references.
Sources
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 al-ijarahSukuk whose holders own leased assets and receive the rent paid by the lessee as their return.Sukuk al-musharakahSukuk whose holders are partners in a venture, sharing profit by agreed ratios and loss in proportion to capital.Sukuk al-wakalahSukuk whose proceeds the obligor invests as agent in a portfolio of eligible assets, for an agreed fee.Periodic distributionThe scheduled payment of rent or profit to sukuk holders on set dates during the life of the sukuk.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.