Fundamentals of Sukuk & Shariah-Compliant Bonds: Navigating the Global Sukuk Market

The Introduction to Sukuk: Understanding Shariah-Compliant Bonds course provides an in-depth exploration of Sukuk, a Shariah-compliant alternative to conventional bonds.. Sukuk, now holding the second-largest market share in Islamic finance after Islamic banking, has experienced a significant rise in global issuances as both established and new players seek to tap into the abundant Islamic liquidity, especially in GCC jurisdictions. Despite this growth, there remains a limited supply of Sukuk to meet the overwhelming demand, underscoring the critical need to understand the structures and types of sukuk most sought after in the market to effectively address this gap. This course is designed to demystify Sukuk structures, issuance processes, and their economic significance.

Participants will gain a comprehensive understanding of how Sukuk differs from conventional bonds, the various types of Sukuk structures, and their alignment with Shariah principles. The course covers essential topics such as asset-backed vs. asset-based Sukuk, debt-based vs equity-based sukuk, the most adopted sukuk structures and features in the market, the role of Shariah advisory boards, investment bankers, and lawyers, and regulatory frameworks/Shariah standards governing Sukuk issuance. Additionally, participants will explore the global Sukuk market, its growth, and its role in funding infrastructure projects and driving economic development.

Through materials based on real market data, interactive discussions, and case studies of real and recent Sukuk deals, participants will also learn about the challenges and opportunities in Sukuk investments, including risk management, secondary market trading, and their potential for portfolio diversification. This course is ideal for financial professionals, investors, legal advisors, and anyone looking to understand the fundamentals of Sukuk and its practical applications. By the end of the course, participants will have the knowledge and confidence to engage with Sukuk markets effectively and leverage their unique advantages in ethical investment portfolios.

By the end of the Introduction to Sukuk: Understanding Shariah-Compliant Bonds course, participants will achieve the following outcomes:

The first day introduces participants to the core concepts of Sukuk, setting the foundation for the entire course. The session begins with an overview of Islamic finance principles, focusing on the key prohibitions such as riba (interest), gharar (uncertainty), and maysir (gambling) that shape the financial transactions in Islamic markets. Participants will gain a deeper understanding of how these principles lead to the development of Sukuk as a Shariah-compliant alternative to conventional bonds. The session will then focus on the definition, history, and evolution of Sukuk. Participants will learn how Sukuk structures have evolved to cater to diverse financing needs while ensuring compliance with Islamic law. The day will conclude with an exploration of different types of Sukuk—particularly the distinction between asset-backed and asset-based Sukuk. Various Sukuk structures such as Ijarah, Murabaha, Mudarabah, and Istisna will be examined in-depth, providing participants with a clear understanding of their unique features and applications.

The day also will focus on the Sukuk issuance process and the role of Shariah compliance in structuring these financial instruments. The course will outline the steps involved in issuing Sukuk, including the critical processes of structuring, underwriting, and conducting a Shariah compliance review. Participants will learn about the importance of Shariah supervisory boards, which ensure that Sukuk issuance remains in compliance with Islamic law and resolve any potential disputes. The session will also provide an overview of the legal and regulatory frameworks governing Sukuk issuance globally and regionally, with a focus on examples from countries like Malaysia and the Gulf Cooperation Council (GCC) nations. This part of the course will highlight some of the common challenges in Sukuk structuring that issuers and investors may face, offering practical strategies to overcome these hurdles.

The second day will focus on the practical applications of Sukuk in the global financial landscape. The session will begin with an analysis of the global Sukuk market, focusing on growth trends, key players, and the increasing popularity of Sukuk as a viable financing option. Participants will also engage in detailed case studies of real-world Sukuk issuances, exploring how Sukuk has been used to finance large-scale infrastructure projects, government initiatives, corporate ventures, ESG/sustainability and social agenda. This session will help participants connect theory to practice and understand how Sukuk is utilized and structured in different sectors. The course will conclude with a discussion on risks and opportunities in Sukuk investments, offering participants a comprehensive understanding of the potential rewards and risk management strategies. The final module will look into the future of Sukuk, exploring how emerging trends such as digital Sukuk, ESG-compliant Sukuk, and growth in untapped markets are shaping the evolution of this financial instrument.

To ensure a comprehensive evaluation of participants’ progress and understanding of each module, the program adopts the following assessment method:

Quizzes and Tests: Short quizzes to assess participants' understanding of key concepts introduced in each session.

The passing mark for this program is 50%, and participants are required to maintain an overall minimum 75% attendance for each module to successfully complete the course.

This course is ideal for:

Participants will have access to a range of recommended resources through the LMS platform. These resources will provide deeper insights into the topics covered in each module and further enhance their understanding of Islamic finance and capital markets.