Assoc. Prof. Dr.
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- PublicationProtecting takaful against the risk of failure: a critical appraisal of the takaful benefits protection system (TBPS) in MalaysiaShaikh Hamzah Shaikh Abdul Razak; Muhammad Ali Jinnah Ahmad; Nurdianawati Irwani Abdullah; Said Bouheraoua; Sa'id Adekunle Mikail (ISRA, 2014)
The establishment of the Takaful and Insurance Benefits Protection System (TIPS) in Malaysia is a statutory requirement. TIPS aims to ensure financial stability, soundness and public confidence. Perbadanan Insurans Deposit Malaysia (PIDM), known internationally as the Malaysia Deposit Insurance Corporation, is the sole regulatory body entrusted with the mandate to regulate deposit insurance across the country. At the outset, its mandate was confined to banking institutions. Since 2010, however, PIDM’s role has been extended to include takaful and conventional insurance institutions. With regard to takaful, the operation of the Takaful Benefits Protection System (TBPS) and the relationship between PIDM and its takaful members pose major concerns that have been raised by the industry in Malaysia. The concerns are related to contractual relationships, sources of premiums, the subject matter of the contract, and the services and guarantee that PIDM provides for takaful participants. This research aims to provide critical Shari'ah analysis and evaluation of the current model of Takaful benefits protection system. It examines the existing model to ascertain to what extent it accomplishes the statury mandate and to what extent it meets Shari'ah requirements. Adherence to regulatory requirements is a must. The takaful industry faces some major challenges in trying to realise the interests of the takaful participants and its shareholders while satisfying the regulators. Thus, it is imperative to conduct an investigation that resolves these thorny issues in a win-win manner.
- PublicationShariah issues in intangible assetsShamsiah Mohamad; Syahida Abdullah; Said Bouheraoua; Noor Suhaida Kasri (Academy of Islamic Studies, University of Malaya, 2015)
Intangible assets are regarded as one of the most important asset classes for financial institutions, and their importance and consideration is rapidly increasing. There are existing, well established conventional standards on intangible assets (IA); however the Shariah standard on IA is discussed rather minimally. Thus, this paper attempts to discuss the vital issues related to intangible assets: recognition and measurement, financing and trading, and zakah, which represents a grey area for the Islamic finance industry. The research employs critical analysis. It aims to provide clarification on the concept of intangible assets from the point of view of the Shariah as well as an analysis of pertinent Shariah issues on IA. This research explores the following: (i) there is an issue of gharar in the identification and determination of IA due to non-existence of any physical substance and due to future benefit being a probabilistic matter; (ii) it is generally permissible to finance and trade IA and (iii) zakah is obligatory on IA if the intention is to trade them either at sale price if they are sold or at market price if they are owned by a trader.
- PublicationA critical analysis of Shari'ah issues in intangible assetsShamsiah Mohamad; Syahida Abdullah; Said Bouheraoua; Noor Suhaida Kasri (ISRA, 2014)
Intangible assets are becoming evident in a number of Islamic financial products. Their presence in the Islamic financial market is due to their ability to address and accommodate the pressing need to diversify the asset pool in the industry. Despite their increasing presence in a number of Islamic financial products, their nature and characteristics have not been the subject of the research they deserve. Hence this research is undertaken to examine the definition, concept and legality of this class of asset: intangible assets. This paper aims to achieve the following objectives: i. To explore the definition and concept of intangible assets from Shariah, legal and accounting perspectives; and ii. To examine pertinent Shar??ah issues on intangible assets, particularly with regard to recognition and measurement, financing and trading, and zakah obligation.
- PublicationFayrus kuruna al-mustajidu (KUFID-19) fi al-manzur al-Islami: at-tada'iyat walhululSaid Bouheraoua (King Abdulaziz University, 2020)
This paper contributes to the discussion forum of King Abdulaziz University for Islamic Economics on the economic, social and legal implications of the coronavirus. It aims to record some observations about the main paper of the forum and provide additional discussion of the economic, social and legal implications. In addition, it proposes solutions to these repercussions based on the principles of Islamic law and its overall objectives. The paper notes that efforts to monitor and analyze these repercussions were undoubtedly significant. However, some of them were characterized by a lack of precision and a piecemeal approach. It deals with some of the proposed solutions, especially on the economic side. The paper concludes that the proposed solutions for overcoming the repercussions of coronavirus according to the Islamic perspective must be based on the comprehensive objectives of the Shariah. Moreover, they must adopt an objective analysis of the facets of these repercussions according to the requirements of systematic research and analysis. This will ensure discipline in the analysis and comprehensiveness in the proposals.
- PublicationImplementing the IFSA investment account: a risk-sharing banking modelSiti Muawanah Lajis; Hissam Kamal Hassan; Adam Shishani; Omar Alaeddin; Said Bouheraoua; Noor Suhaida Kasri (International Shari'ah Research Academy for Islamic Finance (ISRA), 2016)
Recent calls for risk-sharing - as expounded in the 2012 Kuala Lumpur Declaration, the 2014 Jeddah Declaration and the 2014 International Monetary Fund statement - elucidate the present situation of Islamic banking and finance: an acknowledgement that risk sharing is a "salient characteristic" of Islamic financial transactions on the one hand and that it is "not deeply embedded" on the other. The objective of this practical evidence-based research paper is to address this schism between prescription and practice. It recapitulates the principles underpinning risk sharing and the reasons why it is integral to the Shar??ah and why (as stated in the Declaration) risk transfer and risk shifting violate a Shari'ah principle. he paper presents preliminary research utilizing empirical data from Malaysian Islamic banks and the Malaysian stock market as a proxy for the real economy. It considers newly enacted Malaysian legislation, the Islamic Financial Services Act 2013 (IFSA), from the perspective of its aim to more clearly define the products and activities of Islamic banks.
- PublicationAdoption of the COSO methodology for internal Shari'ah auditSaid Bouheraoua; Fares Djafri (Emerald Publishing Limited, 2022)
Islamic financial institutions (IFIs) are required to establish a Shari'ah Governance Framework (SGF) to strengthen their Shari'ah compliance mechanism and ensure that all relevant IFI regulations are in line with Shari'ah rules and principles. Effective implementation of the Shari'ah-compliance function will further promote stakeholder confidence, as well as the integrity of IFIs, by reducing Shari'ah non-compliance risks. This study aims to examine the internal control framework developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and explore the extent to which it can be incorporated in the Shari'ah-compliance function of IFIs. This study adopts a qualitative method of inquiry, utilizing the inductive method and content analysis to build comprehensive knowledge that will assist in exploring the framework of COSO methodology and the extent to which it can be adopted by IFIs. The findings indicate that the existing frameworks of Shari'ah governance, whether that of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) or Bank Negara Malaysia (BNM), need to be further developed. Therefore, the adoption of COSO methodology in the internal Shari'ah audit of IFIs, as suggested by AAOIFI, is not only possible but desirable. The study also finds that the COSO framework places the highest priority on risk management in that it makes it an integral part of the decision making process in all the institution's activities. As a result, incorporating the comprehensive COSO risk management structure within the Shari'ah-compliance function will enhance risk management in IFIs.
- PublicationDawabit 'iqmal maqasid al-Shari'ah fi tawjih al-mu'amalat al-maliya al-mu'asiratSaid Bouheraoua (International Islamic Fiqh Association, 2023)
An abstract is written in Arabic.
- PublicationThe emerging Shari'ah issues of the COVID-19 pandemic in contemporary Islamic financial applicationsSaid Bouheraoua; Sa'id Adekunle Mikail; Fares Djafri (International Shari'ah Research Academy for Islamic Finance (ISRA), 2021)
The outbreak of the coronavirus epidemic (COVID-19), classified by the World Health Organization as a pandemic, has led to the emergence of many challenges. It started as a health crisis and then turned into a global economic crisis that most countries could not manage or control as a result of lockdown policies and restrictions on movement and travel. This is not to mention the forms of damage that have affected the contractual obligations and rights of various contracting parties at the level of financial institutions such as banks, takaful companies and others. The challenges imposed by the coronavirus pandemic have led to a reexamination of the fiqh treatment of catastrophes. The role of Islamic economic experts and the Islamic financial industry has had to be clarified in addressing its effects on contractual relations and future obligations in distressed financing contracts. The theory of catastrophes (jawa'ih) is one of the most important jurisprudential theories in Islamic fiqh. It comprises a set of principles and provisions that deal with the harmful effects upon one of the parties bound by a contract as a result of damage to what the party is obliged to deliver, or failure to obtain the intended benefit from the obligation. It is based on achieving justice in the practical application of financial transaction contracts, removing difficulty, taking into account arising circumstances, and preventing abuse in the exercise of rights and the freedom to contract. It thus regulates the rights of people related to the exchange of properties and usufructs.
- PublicationZakat al-duyun al-masrifiyat al-muajalat: al-ithar al-nazari 'ard wa taqwimRiaz Ansari; Said Bouheraoua; Sa'id Adekunle Mikail (International Shari'ah Research Academy for Islamic Finance (ISRA), 2016)
This research examines the issue of zakah on non-current banking debts within its theoretical framework. The main problems dealt with are the conflicting contemporary juristic opinions on the issue of zakah on non-current banking debts as well as the conflicting ways that these opinions have been implemented. This makes it necessary to pinpoint the most important causes for the controversy and to identify the weightiest opinion on the matter. The study begins by defining non-current banking debts and identifying their most salient characteristics. It then undertakes an explanation of the classical scholarly controversy regarding zakah on debts which are not yet due. The authors have chosen the second view, which is that zakah is obligatory on debts that are currently due and upon the capital and profits that will come due during the current financial year. Nevertheless, the authors see the necessity of an empirical study relying upon experts in the calculation of zakah to explore the economic impact that implementation of each of the three views mentioned would have and to choose the opinion that secures justice for both sides of the zakah function (those upon whom it is due and its rightful recipients). Regarding the aggregate wealth upon which zakah is due, the study has examined the views of contemporary scholars on the zakat able wealth of financial institutions. This is determined by accounting for all of the institution's assets and all of its liabilities. The study explains the most prominent resolutions on this matter, as well as the evidence cited, without voicing a preference for one resolution over another. The study also deals with the scholarly controversy regarding the zakah obligation on the government's share in Islamic financial institutions in which it owns all or part of the shareholder capital. The authors favor the third approach regarding the obligation of zakah on mixed wealth, that if the government rules it to be obligatory it shall be levied on all the shares, including those of the government.
- PublicationIslamic finance regulations in Malaysia: a macro maqasidic approachSaid Bouheraoua; Younes Soualhi (IIUM Press, 2018)
The research aims primarily to identify the main macro objectives of Shari'ah (macro maqasid) that the regulators are supposed to imbue in the Acts and guidelines governing Islamic Financial Institutions. Focusing on Malaysia, the research starts with the conceptual framework of Islamic finance regulations, which addresses the objectives enshrined in the Acts and guidelines promulgated. After exposing the overall environment of Islamic finance in Malaysia, the research discussed some obstacles of regulations, namely harmonization between Shari'ah and law and its potential impact on the realization of maqasid al-Shari'ah. In order to give a glimpse on further obstacles, the research briefly discussed the governance framework, the prudential and risk management regulations, and the Shari'ah standards in terms of maqasid compliance. The research found that the Malaysian expertise in Islamic regulation is very commendable but no free from criticism as some are deemed maqasid non-compliant. More importantly, the research delineated the macro maqasid entrusted with the regulators to observe and imbue in the regulations of Islamic finance. The research found that Islamic finance regulations are not completely independent from conventional ones, let alone the independence from international regulatory regimes and practices. This should call for the propounding of a theory of maqasid specific to Islamic finance focusing on regulations at macro-economic level. The study recommends the operationalization of the macro maqasid at the regulatory level first before operationalizing them at the level of Islamic financial Institutions.
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