Research Monograph

The interest in developing Islamic fintech in Malaysia and the efforts in achieving it are constantly on the rise. Several startups have launched Shariah-compliant fintech solutions. Shariah advisory boards at regulatory and industry levels have discussed various Shariah issues related to fintech. Resolutions and exposure drafts have been issued or modified by regulators to cover a wide range of Islamic fintech activities. Some government agencies have established dedicated departments to support fintech and the Islamic digital economy. Universities and training centres have started offering specialized courses and programmes to provide the requisite human capital, while research centres have invested in substantial efforts to push the industry forward by conducting extensive research and providing consultancy services. This report documents a representative sample of such efforts.

Sukuk in its contemporary form as a financial instrument has gained prominence only over the last one to two decades. Like a share, a sukuk is defined as an instrument representing undivided ownership over the underlying assets. Naturally, the question arises whether sukuk are subject to the same zakat rulings as shares. Accordingly, this research has identified the similarities between shares and Sukuk. The zakat rulings applicable to shares are also identified, and the research has made an attempt to apply those rulings in the context of sukuk. However, the research has identified the peculiarities of sukuk as it is currently practiced in the global market and provided fresh insights on how these may impact the applicability of zakat to sukuk. While the research includes theoretical Shari'ah analysis and discussion on various relevant zakat matters, it also reviews today's practices. Accordingly, relevant Shari'ah standards and requirements of various jurisdictions are identified, and several sukuk prospect uses are examined in relation to zakat calculation and disclosures. By this the research aims at enabling a coherent understanding of the theory and practice.