Islamic Treasury and Risk Management Products Course
Accounting, Finance and Budgeting Training

Select Other "city & date"
Islamic Treasury and Risk Management Products Course
Course Overview:
The Islamic Treasury & Risk Management Products training course of Islamic Financial Products Risk Management Policy provides the students with a focused approach to Islamic treasury products as far as risk management is concerned.
By the conclusion of the course, the students will have acquired the skills to understand and manage risks concerned with the Islamic treasury products, perform cross jurisdiction analysis and employ Islamic finance techniques to money market activities, Manage Foreign Exchange Risks in the International Markets through Shariah compliant hedging techniques, deposits in the form of Mudarabah and Wakalah and Interbanking mechanisms inclusive of Murabaha and Tawarruq will also be taught.
The participants will additionally examine Sukuk as viable alternative trading instruments and how the rate of return and FX risks can be managed using Shariah compliant templates. This program is most appropriate to work sought and learners of Islamic finance, issuers of Sukuk and investors aiming for a higher appreciation of treasury and risk management products under Islamic finance context.
Course Objectives:
By the end of this Islamic Treasury & Risk Management Products training course, participants will be able to:
- Identify and manage risk in Islamic Treasury products
- Comparative analysis of treasury and risk management products in various
- jurisdictions
- Application of various Islamic toolkits in the Islamic money markets
- Manage foreign exchange instruments and associated rate risks
Who Should Attend?
Islamic Treasury & Risk Management Products training program is ideal for:
- Those who wish to understand the main Islamic principles and concepts which relate to Islamic Banking and finance.
- Islamic Finance professionals
- Corporates and banks issuing Sukuk
- Islamic investors in Sukuk
Course Outlines:
The Nature of Money & Implication on Treasury
● The rules of Sarf and contract
● Riba Al-Nasiah
» Discussion: identifying assets that may be traded or
pledged from a Shari'a perspective
● Overview of traditional Money Market activities:
» Deposit & Interbank transactions
» Tradable Instruments
» Repo
Key Islamic Depository Tools
● Summary rules for non-remunerative deposits:
» Qard/Wadiah deposits
● Summary rules for remunerative deposits:
» Mudarabah deposits
» Wakalah deposits
» Murabaha deposits
● Traditional Intrabank Relationship: Fund Transfer Pricing
(FTP), Inter-branch Pricing (IBP) etc
Main Islamic Interbank Tool
● Murabaha vs. Tawarruq vs. Reverse Murabaha - is there any difference?
● Shari'a is concerned about this tool
● Brokers, OTC, and live warrants
● Breakage, Back value, and compounding
● Suq al Sila - Murabaha and Tawarruq in Malaysia
● Standardized documents: IIFM, AIBIM
● Leakage of Islamic funds - what is this? How do different markets deal with this?
Other Islamic Interbank Tool
● Wakalah to do Murabaha vs. Investment Wakalah - what’s the difference?
● Case study: Investment Dar vs. Blom Interbank Wakalah
● Interbank Mudarabah
● Wadiah for hibah & Wadiah for points
Tradable Instruments
● A brief review of traditional tradable tools:
» Certificate of Deposits
» Government Securities (T-Bills etc)
» Banker’s Acceptance
» Commercial Papers
» Quotation basis: yield vs. discount
● Does the Islamic market have alternatives for all the tools above?
Introduction to Sukuk - alternative Islamic tradable instruments
● Short-term, high-grade issuance for Basel III:
» Central Bank of Bahrain Salam Sukuk
» Short term Sukuk Ijarah
» Are these instruments freely tradable in the secondary
market?
● Longer-Term Sukuk
» Common structures: Ijarah, Istithmar
» Asset-based vs. Asset-backed Sukuk
» Tradability - Shari'a guideline
» Tenure: Malaysia vs. Global
» Pricing: Fixed-rate vs. Floating Rate Sukuk
Repo
● Understanding a conventional repo
● Why are Repos not widely used in the Islamic market?
● How could an Islamic repo work?
● The IIFM solution
● Alternative solutions
Managing FX Risk
● Shari'a compliant forward alternatives:
» Promise-based solutions - unilateral promise, two
unilateral promises vs. bilateral promises
» Promise to deposit i.e. Cross Currency Deposit
» Are these solutions on the balance sheet or off-balance
sheet?
» Exiting these forward?
● How do Islamic banks hedge themselves?
» Long Murabaha
» Back-to-back promise
Group Exercise: Examine a traditional FX Swap & construct a
Shari'a compliant FX Swap
Managing FX Risk II
● Shari'a tools that provide options:
» Arbun
» Promises
» Juala
● How do we use the above to structure Shari'a-compliant
currency options?
» Arbun - is the arbun for currency?
» Promises - how do we structure the option premium?
» Which solution is widely used?
● Calculating effective and break-even strike rate
● Are the options tradable?
Group Exercises:
1. How to use Tawarruq for Currency Option?
2. Are the following FX Risk Management Strategies
replicable in the Islamic market?
i. Put Option
ii. Put Spread
Managing Rate Risk
● Shari'a analysis of the following traditional tools for interest
rate risk management
» Forward Rate Agreement (FRA)
» Interest Rate Futures
» Swaps - Interest Rate Swap (IRS) and Cross Currency
Swap (CCS)
» Interest Rate Options
Group Discussion: Are the following Interest Rate Option
Are strategies replicable in the Islamic market?
i. Interest Rate Cap
ii. Interest Rate Floor
iii. Interest Rate Collar
see more: Loan Structuring, LBOs and Acquisition Finance Course