Islamic Treasury & Risk Management Products
INTRODUCTION
Islamic Finance Training presents a course that aims to analyze treasury and risk management products offered by Islamic Financial Institutions (IFIs) in various jurisdictions. Delegates will be led through the vocabulary and nomenclature of Islamic finance applicable to the Islamic treasury. Various Islamic toolkits will be examined to learn how they are applied in the money market and risk management activities.
Islamic Treasury & Risk Management Products training course will also examine how Sukuk is relevant to Treasury activities be it for liquidity management, long term funding options or capital adequacy purposes. It will also look at how the various Islamic tools are applied to manage forex and rate risks
OBJECTIVES
At the end of the Islamic Treasury & Risk Management Products training programme, you 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 programme 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 OUTLINE
Day 1
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 Sharia 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
Day 2
Main Islamic Interbank Tool
Murabaha vs. Tawarruq vs. Reverse Murabaha - is there any difference?
Shari'a 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?
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
Day 3
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
Other Islamic Interbank Toolmarket?
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 Day 4 Managing
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 Sharia a compliant FX Swap
Sharia 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
Day 5
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 Strategies replicable in the Islamic market?
i. Interest Rate Cap
ii. Interest Rate Floor
Interest Rate Collar
IN-HOUSE TRAINING
LPC Training is capable of conducting this training programme exclusively for your delegates. Please e-mail us on admin@lpcentre.com for further information and/or to receive a comprehensive proposal.
www.lpcentre.com
DOCUMENTATION
High-Quality material has been prepared by the LPC team for distribution to delegates. In addition, a special note pad to facilitate note-taking will be provided.
CERTIFICATES
Accredited Certificate of completion will be issued to those who attend & successfully complete the programme.
SCHEDULE
Our Course timings commence at 09:00 and conclude at 13:00.
REGISTRATION & PAYMENT
Please complete the registration form on the course page & return it to us indicating your preferred mode of payment. For Further Information, please get in touch with us.
CANCELLATION AND REFUND POLICY
Delegates have 14 days from the date of booking to cancel and receive a full refund or transfer to another date free of charge. If less than 14 days notice is given then we will be unable to refund or cancel the booking unless on medical grounds. For more details about the Cancellation and Refund policy, please visit www.lpcentre.com/terms-and-conditions/
TRAVEL AND TRANSPORT
We are committed to picking up and dropping off the participants from the airport to the hotel and back.
LONDON
Oxford Street Offices: London - Oxford Street 25 N Row, London W1K 6DJ
+44 (0) 20 36 916 970
West London Office: 47 49 Park Royal Road London NW10 7LQ +44 (0) 20 80 900 464
info@lpcentre.com
DUBAI
Business Bay - Marasi Drive Churchill Tower commercial1, Office 107 +971 4 421 4616
dubai.training@lpcentre.com
KUALA LUMPUR
No. 03-06-05, UOA Business Park, Jalan Pengaturcara U1/51A, Section U1, Kawasan Perindustrian Temasaya, 40150 Shah Alam, Selangor
+60 19-305 5694
www.lpcentre.com
www.lpcentre.com