IBANK 10.3.21 Wakalah Sukuk

(1) In wakalah sukuk, the sukuk holders provide the capital for Shari'a-compliant investment activities, and the investment agent (wakeel) undertakes to invest the funds. These sukuk entitle the holders to a return in proportion to their investment in the underlying assets and a right (under a purchase undertaking) to buy all or a proportion of the underlying assets if specified conditions are fulfilled.
(2) In wakalah sukuk, the SPE acting as the principal on behalf of the sukuk holders appoints a wakeel to invest funds provided by the sukuk holders into a pool of assets. The wakeel lends its expertise and manages those investments on behalf of the SPE for a particular period, in order to generate a return for the sukuk investors.
(3) The SPE and the wakeel enter into a wakalah agreement to govern the appointment, scope of services and fees payable to the wakeel, if any.
(4) The pool of assets may comprise a broad range of Shari'a-compliant assets that selected by the wakeel for a period corresponding to the duration of the sukuk (for example, Shari'a-compliant equities, Shari'a-compliant assets such as real estate and cars, murabahah, istisna, other sukuk).

Note While the wakalah structure has some similarities to the mudarabah structure, the ways in which holders receive their share of profits differ:
•   wakalah sukuk holders receive the return on their investments less the management fees payable to the wakeel
•   in a mudarabah structure, the profits are divided between the parties according to agreed ratios.
Amended by QFCRA RM/2017-1 (as from 1st April 2017).