Shari'ah Non-compliance Risk Management and Legal Documentations in Islamic Finance

Chapter 10

Useful Information and Samples of Legal Documentation

10.0. INTRODUCTION

This chapter includes various samples of contracts in different applications of Islamic finance. It also includes contracts of ABIM, the Association of Islamic Banking Institutions Malaysia, as approved by the AIBIM Sharī`ah Advisory Committee.

10.1. SAMPLE OF AN AGREEMENT (MUSHARAKAH AGREEMENT IN SUKUK ISSUANCE)

The following is a sample of a contract of management agreement in sukuk musharakah issuance.

THIS MANAGEMENT AGREEMENT is made on the_________ day of 2014

BETWEEN:

1. ABC bank Islamic Berhad (Company No. 11111), a company incorporated in Malaysia with its registered office at Kuala Lumpur (the “Issuer”);

AND

2. XYZ Trustees Berhad (Company No. 22222), a company incorporated with limited liability under the laws of Malaysia and having its registered office at Kuala Lumpur (as the “Sukuk Trustee”).

RECITALS

A. Pursuant to the resolutions of the Board of Directors of the Issuer passed on 19 June 2015, the Issuer has been empowered to undertake the issuance of Ringgit One Billion (RM1,000,000,000.00) in aggregate nominal value of redeemable unsecured subordinated sukuk based on the Sharī`ah principles of Musharakah (“Sukuk”). The Sukuk will mature on the Maturity Date with an option given to the Issuer (subject to the fulfilment of the Redemption Conditions) to redeem all and not a part only of the Sukuk on the fifth (5th) anniversary of the Issue Date and every Periodic Distribution Date ...