Islamic Finance & CMA Regulations Flashcards
6 cards from real CME-1 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Islamic Finance & CMA Regulations flashcards as text
What is a 'wakala' structure in Islamic finance?
Answer: An agency agreement where one party (agent/wakeel) acts on behalf of another (principal) for a fee, used in sukuk and fund management
Wakala is an Islamic agency contract where the wakeel (agent) manages assets or funds on behalf of the principal for an agreed management fee, used in sukuk structuring and investment management.
What distinguishes 'ijara sukuk' from 'murabaha sukuk'?
Answer: Ijara sukuk are lease-based with periodic rental payments; murabaha sukuk are cost-plus sale based with a lump-sum return
Ijara sukuk generate returns from periodic lease rentals on underlying assets; murabaha sukuk generate returns from the profit margin in a cost-plus sale, typically resulting in a bullet payment.
What is the concept of 'zakat' and its relevance to Saudi capital market participants?
Answer: An obligatory annual wealth tax under Islamic law payable on qualifying assets above the nisab threshold, relevant to company and investor obligations
Zakat is an obligatory annual levy at 2.5% on qualifying net wealth above the nisab. Saudi listed companies may have zakat obligations, and compliance is overseen by the Zakat, Tax, and Customs Authority.
What is the purpose of the 'Shariah fatwa' in structuring Islamic capital market products?
Answer: A formal religious ruling from qualified scholars certifying that a financial product's structure complies with Islamic law
A Shariah fatwa is a formal legal opinion from qualified Islamic scholars confirming that a product's structure, contracts, and intended use comply with Islamic jurisprudence.
What is the IFSB and its relevance to Saudi Islamic finance regulation?
Answer: An international standard-setting body for prudential regulation and supervision of Islamic financial services, whose standards influence Saudi practice
The Islamic Financial Services Board (IFSB) issues prudential standards and guidelines for the sound regulation of Islamic banks, insurance, and capital markets globally, influencing Saudi regulatory frameworks.
What is 'istisna' and in what context is it used in Islamic project finance?
Answer: A manufacturing or construction contract where payment is made in advance or installments for a specified asset to be built and delivered, used in real estate and infrastructure
Istisna is a contract for the manufacture or construction of a specified asset; payment can be in installments and delivery at completion, making it ideal for project finance and real estate development.
How this page was made: written with AI tools and published by Nathan Beja, founder of Practice Test Geeks, who is responsible for its content. Exam facts are checked against the official sources listed below. Not reviewed by a subject-matter expert. Editorial policy
Sources & references
Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy