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What Shariah concept are microLEAP's Islamic Investment Notes based on?

microLEAP bases its Islamic Investment Notes on the concept of Tawarruq. Tawarruq involves a purchase of assets or commodities on a deferred payment basis by way of Murabahah.

What is Tawarruq and what is Commodity Murabahah?

Though it is used interchangeably nowadays, Tawarruq means ‘monetisation’ and Commodity Murabahah refers to the concept of ‘cost plus profit using commodities’.

Generally, the Tawarruq terms are commonly used in the Middle-East and Commodity Murabaha more popular in Malaysia.

Tawarruq is the over-arching arrangement where multiple contract work together; Wakalah, Murabahah and Musawamah to complete the Tawarruq arrangement.

What businesses are considered Shariah compliant / non compliant?

Below is the list of shariah non-compliant activities as per Securities Commission Malaysia:

  1. Conventional Banking
  2. Conventional Insurance
  3. Gambling
  4. Liquor & Liquor-related Activities
  5. Pork & Pork-related Activities
  6. Non-halal food and beverages
  7. Tobacco and Tobacco-related activities
  8. Stockbroking or Share Trading in Shariah Non-compliant Securities
  9. Shariah Non-compliant Entertainment
  10. Other Activities Deemed Non-compliant According to Shariah

Anything outside the non-compliant list will generally fall within Shariah compliant activities.

microLEAP’s Shariah Advisors will have final say on what is considered Shariah on microLEAP’s platform.