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Beneficial ownership and its application in Islamic finance: an analysis from the Shari'ah perspective

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Date
2017
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Abstract
Beneficial ownership is applied in the modern Islamic financial contracts such as financing and sukuk structure, especially in countries where common law is dominant. It has been recognized by some scholars and rejected by others. In this regard, the concept of beneficial ownership in Shari'ah should be analysed to develop a clear interpretation of the concept of beneficial ownership from the Shari'ah perspective. The purpose of this study is to examine the meaning of beneficial ownership in Common Law system and its recognition from the Shari’ah point of view. It begins with identifying the meaning of milkiyyah (ownership) and its characteristics in the Islamic law and followed by the analysis of beneficial ownership in the current practice of Islamic finance as to whether it fulfils the Shari’ah requirements. The approach that is applied in this study is qualitative research in nature, with regards to documentation and secondary sources by reviewing and analysing the application of beneficial ownership in Islamic banking; in addition, some interview sessions were conducted with practitioners involved in the financial industry. The findings of the research are that the transfer of ownership in Shari’ah immediately occurs after the execution of ijāb and qabūl and interestingly, this idea is also shared by the Common law, which actually borrowed it from the Islamic law.
Keywords
Beneficial ownership , Shari'ah , Milkiyyah
Citation
Nik Abdul Ghani, N. A. R. (2017). Beneficial ownership and its application in Islamic finance: an analysis from the Shari'ah perspective (Doctoral dissertation). INCEIF, Kuala Lumpur. Retrieved from https://ikr.inceif.org/handle/INCEIF/2747
Publisher
INCEIF
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