I have had the opportunity to work directly on Sukuk issuances and have reviewed a number of Sukuk over the years from Tier 1 through to Sovereign. While Sukuk sound quite simple in theory, in practice they are much more complex.

If you would like to understand them better for any reason, the following 5 steps may assist you:

1. Study the Shariah Pronouncement issued by the Shariah Board/Committee of the issuance. There might be more than one for the same issuance.

2. Study the Structure Diagram and Cashflows. This can be found in the prospectus.

3. Read the prospectus thoroughly. It is usually long and can be complicated but it will enable you to fill in any gaps in your understanding.

4. Read practical research on Sukuk. There is a great book in Arabic by our Sheikh Mohamed Elgari on the topic which has been published by the Shariah Department at Bank Aljazira in KSA.

5. Go through AAOIFI’s Sukuk Standards. (Previous standard and the draft of the new standard which is very comprehensive and will impact future issuances once implemented).