Islamic Capital Markets
What the exam tests
This domain tests sukuk, Islamic funds, equity screening, securitization, and capital-market transactions. The exam focuses on whether instruments represent genuine ownership or claims and whether screening excludes prohibited activities.
Core rules
- Sukuk are certificates representing ownership in an asset, usufruct, project, or business, not pure interest-bearing debt.
- Common sukuk structures include ijarah, mudarabah, musharakah, wakalah, and salam.
- The underlying asset must exist, be Shariah-compliant, and be transferred genuinely.
- Equity screening excludes haram sectors and sets tolerance limits for interest income and leverage.
- Islamic funds must avoid prohibited income and purify incidental haram income.
Worked example
A company has total assets of 1,000 million, debt of 200 million, and interest income of 20 million. Debt is 20% of assets, below a 33% threshold. Interest income is 2%, below a 5% threshold. If the company has no haram core business, it may pass screening. If interest income were 80 million, at 8%, it would fail the same threshold.
Traps
Do not assume sukuk principal is guaranteed. Do not ignore the asset or the true sale. Do not apply screening ratios without checking the actual sector. A conventional bond with a new name is not a sukuk.