Tradability of Sukuk Quiz

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Questions and Answers

What is the main focus of the text?

Introduction to Islamic Money Market

Global Sukuk Issuance

Types of Sovereign Sukuk

The issuance of GOP Ijarah Sukuk (correct)

Why are securities representing a loan or debt (such as Bonds) stated to be non-tradeable?

They are not approved by Shariah compliance authorities

Regulatory restrictions prevent their trade

They have a fixed maturity date

They cannot be sold or purchased once issued (correct)

What is the purpose of the Islamic Money Market?

To facilitate the trading of non-tradeable securities

To support the issuance and trading of Shariah-compliant financial instruments (correct)

To regulate the issuance of Sovereign Sukuk

To provide interest-based financing options

What type of Sukuk is specifically mentioned in the text?

Ijarah Sukuk Signup and view all the answers

In which country is the issuance of Sovereign Sukuk discussed?

Pakistan Signup and view all the answers

What is the focus of the section 'The Future – Asset Light Sukuk Issuances'?

The advantages of adopting asset-light Sukuk structures Signup and view all the answers

What is the primary reason for preferring Sukuk over traditional securities representing a loan or debt?

Tradeability in the secondary market Signup and view all the answers

What is the meaning of 'Sukuk'?

Certificates representing undivided shares in ownership of tangible assets, usufruct and services Signup and view all the answers

What is the key difference between conventional bonds and Sukuk?

Conventional bonds are not Shariah compliant while Sukuk are compliant with Islamic finance principles Signup and view all the answers

What does the issuance of Sukuk generally entitle holders to?

Share in the revenues generated by the Sukuk assets Signup and view all the answers

What types of projects can Sovereign and Quasi sovereign Sukuk be used for?

Budget financing and infrastructure project financing Signup and view all the answers

Which type of Sukuk is usually short term and used for financing commodity operations?

Salam/Istisna Signup and view all the answers

What happens when the Sukuk is reopened?

The issue size increases, while the coupon rate and maturity remain the same Signup and view all the answers

In what way can Hybrid Sukuk be structured?

Combination of two modes such as Musharakah and Salam/Istisna Signup and view all the answers

What do investors bid on in case of reopening of Sukuk?

Purchase price Signup and view all the answers

What is created when a pool of tangible and intangible assets is established for Sukuk?

(A pool) where a significant portion of tangible asset is available Signup and view all the answers

In Islamic context, what happens at the time of reopening of Sukuk?

The transaction is concluded by purchasing additional share in the identified asset on Musharaka basis, which is then given on rent/Ijarah Signup and view all the answers

What is the primary purpose of Corporate/Private/FI Sector Sukuk issuance?

(Funding) for sustainable growth and short term equity/JV financing Signup and view all the answers

What differs in the structure of reopening of Sukuk compared to the first issue?

The purchase price components Signup and view all the answers

What should be at least 1 year from the reopening date at the time of reopening of the Sukuk?

Remaining tenor of the Sukuk Signup and view all the answers

Which assets have Sukuks been issued under Ijarah structure?

All of the above Signup and view all the answers

What percentage of Total Global Sukuk Issuances is Sovereign Sukuk from 2001 to 2019?

15% Signup and view all the answers

What is the proposed underlying mode for 'The Future- Asset Light Sukuk'?

Salam / Istisna Signup and view all the answers

Which type of Sukuk is not tradable?

Hybrid Sukuk Signup and view all the answers

What is the period for rental payments in the Ijarah Agreement of GOP Ijarah Sukuk?

6 months Signup and view all the answers

What does the Service Agency Agreement entail in GOP Ijarah Sukuk?

Routine maintenance by the Lessee and major maintenance by the Lessor Signup and view all the answers

What does the concept of 'reopening of Sukuk' refer to?

Seeking additional funds under the same terms and conditions Signup and view all the answers

What is the role of PDSCL in GOP Ijarah Sukuk?

Acting as Investment Agent of Investors and Issuer of the Sukuk Signup and view all the answers

Which entity executes an Agency Agreement with PDSCL to act as a Paying Agent in GOP Ijarah Sukuk?

SBP-BSC Signup and view all the answers

What is the objective of GOP Sukuk in line with the constitution of Pakistan?

To eliminate riba from the society Signup and view all the answers

What distinguishes Sukuks from conventional bonds?

Sukuks are backed by actual underlying assets Signup and view all the answers

What is the underlying asset for the Future-Asset Light Sukuk?

Crude Oil and Petroleum Products Signup and view all the answers

In the Salam/Istisna structure, who will make the advance payment for the purchase of Crude/Refined Oil?

Sukuk holders Signup and view all the answers

What is the mode of Sukuk issuance mentioned in the text?

Murabaha Signup and view all the answers

Who will be involved in the sale of acquired Oil products to GOP on deferred Murabaha in the Murabaha structure?

Investment Agent Signup and view all the answers

What is the tradability status of Sukuk as per the details provided?

Not tradable Signup and view all the answers

Which parties are involved in the Future-Asset Light Sukuk related to oil products?

Sukuk holders, Investment Agent, State-owned OMCs, Oil Refineries Signup and view all the answers

What is the financing method mentioned for Sukuk linked with local revenue collection?

Bai Muajjal Signup and view all the answers

Which type of Sukuk is mentioned for Sustainable Development in the text?

Green Sukuk Signup and view all the answers

Study Notes

Characteristics of Sukuk

Sukuk represents ownership in an asset, not a debt obligation, making it non-tradeable
Meaning of 'Sukuk': certificates of equal value representing undivided shares in the ownership of tangible assets
Key difference between conventional bonds and Sukuk: Sukuk represents ownership, while bonds represent debt

Types of Sukuk

Ijarah Sukuk: usually short-term, used for financing commodity operations
Asset Light Sukuk: mentioned for the future
Hybrid Sukuk: can be structured in various ways
Salam/Istisna Sukuk: involves advance payment for the purchase of Crude/Refined Oil
Murabaha Sukuk: involves sale of acquired Oil products to GOP on deferred Murabaha
Sovereign Sukuk: issued by governments, e.g., in Pakistan
Quasi Sovereign Sukuk: issued by government entities
Corporate/Private/FI Sector Sukuk: issued by companies and financial institutions, primarily for financing operations
Sukuk for Sustainable Development: mentioned in the text

Characteristics of Sukuk Issuance

Issuance of Sukuk generally entitles holders to a proportionate ownership in the underlying assets
Key advantage of Sukuk over traditional securities: Sukuk represents ownership, aligning with Islamic principles
Reopening of Sukuk: allows for additional issuance of Sukuk, with differences in structure compared to the first issue
In Islamic context, reopening of Sukuk involves a new sale and purchase agreement

Sukuk Structure and Participants

GOP Ijarah Sukuk: involves a Service Agency Agreement, and PDSCL acts as a Paying Agent
In Salam/Istisna structure, the buyer makes the advance payment for the purchase of Crude/Refined Oil
In Murabaha structure, GOP will be involved in the sale of acquired Oil products on deferred Murabaha
Parties involved in the Future-Asset Light Sukuk: relate to oil products
Financing method for Sukuk linked with local revenue collection: mentioned in the text

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Description

Test your knowledge on the tradability of different types of Sukuk, including Ijarah, Murabaha, Musharakah, Istisna/Salam, Services, and Hybrid Sukuk, as well as their conditions for tradability.