Halal Certification for Financial Products: A Transaction Cost Perspective

Hayat, Raphie; Butter, F.A.G. den; Kock, Udo

doi:10.2139/ssrn.1966013

Cited by 12 publications

(16 citation statements)

References 34 publications

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“…SCIFs are a form of ethical investments; therefore, participating investors must adhere to Shariah principles (Derigs and Marzban, 2008;Hayat and Kraeussl, 2011;Mansour et al, 2015). It is the role of the Shariah supervisory board (SSB) and other regulatory bodies to ensure that any new company adheres to the principles and to approve the fund to invest in this institution (Hallerbach, et al, 2004: Hayat et al 2013. SCIFs apply two types of screening criteria for choosing securities: (i) sector criteria; and (ii) financial criteria.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Therefore, regulators monitor companies' business activities to ensure that they maintain compliance with Shariah guidelines and avoid Haram income from prohibited business activities (Haniffa & Hudaib, 2007;Ho et al, 2012;Mansour et al, 2015;Ho, 2015). For this reason, each Islamic financial institution has a SSB to govern it and ensure that all its practices are in accordance with these guidelines (Derigs & Marzban, 2008;Walkshäusl & Lobe, 2012;Hayat et al 2013). Their main responsibility is that each one "approves proposed [investee] companies and monitors the compliance of their business activities with the guidelines of the Shariah" (Walkshäusl & Lobe, 2012, p.1).…”

Section: Literature Reviewmentioning

confidence: 99%

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Content Analysis of Shariah-Compliant Investment Equity Funds in KSA: Does Social Justice Matter?

Alotaibi¹,

Hariri²

2020

IJBM

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This paper examines the influence of capitalism and globalisation on the role of Shariah-Compliant Investment Funds (SCIFs) in promoting social justice in the Kingdom of Saudi Arabia (KSA) using content analysis method. This is to analyse the Terms and Conditions (T&C) of SCIFs as they appear in Tadawul (Saudi stock market) in 2019 and compared with the findings in 2013. This research critically evaluates the findings of the content analysis through aspects of globalization and insights from the literature review. The content analysis shows that SCIFs in KSA are disjointed and decoupled from Islamic principles and do not fulfil the ideal social justice role in society.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Content Analysis of Shariah-Compliant Investment Equity Funds in KSA: Does Social Justice Matter?

Alotaibi¹,

Hariri²

2020

IJBM

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“…Hayat and colleagues [37] observed that the Halal certification process requires significant financial investment and takes considerable amount of time to complete. They explained that the cost of certifying a financial product as Halal is $122,000 and takes 2-3 months to complete.…”

Section: Impact Of Halal Certification On Halal Food Businessesmentioning

confidence: 99%

Halal food certification in the UK and its impact on food businesses: a review in the context of the European Union.

Fuseini

2017

CABI Reviews

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The majority of Muslims only consume Halal food because they believe the consumption of such foods is a commandment from Allah (God). Whilst Halal food may be readily available in Muslim-majority countries, Muslims living in the West often encounter a great deal of difficulty in finding Halal food. This led to the establishment of several unregulated Halal Certification Bodies (HCBs) within the European Union and other industrialized economies in an effort to assure Halal consumers that Halal certified products are consistent with the Islamic dietary laws. However, these HCBs operate according to varying Halal standards, brought about by differences in opinion regarding the interpretation of some aspects of the Islamic dietary laws enshrined in the Quran (Islamic Holy Book) and Hadith (Teachings of the Prophet of Islam). This has created confusion among food businesses and Halal consumers regarding what is true Halal, it also particularly makes the regulation of HCBs very cumbersome. This paper aims to review literature on the economic significance of the Halal food market and explore the activities of HCBs and the impact of these on UK Halal food businesses.

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“…Afshar (2013) on the other hand, contends that "here are fundamental risk/return differences between the two..." but concedes that "the fundamental difference in their structure has great religious difference but virtually no financial differences." Other issues relate to the cost of issuance of sukuk vs bonds, Hayat, Den Butter, and Kock (2013), accounting Saad and Hanif (2014) ;Hanefah, Noguchi, and Muda (2013), while El-Gamal (2009) raises a more basic issue of equity vs efficiency. Since it is hard to resolve such issues theoretically, empirical studies may shed light on the economic substance of Islamic securities as to the extent to which these retain elements of interest.…”

Section: Theoretical Issues and Literature Reviewmentioning

confidence: 99%

Co-integration of Sukuk and Bond Yields - Evidence from Globally Placed Sukuk

Uppal¹,

Mangla²

2017

jms.2014

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The study addresses the question "How do the financial markets perceive and price internationally issued Islamic bonds?" It is examined by empirically testing for the evidence of co-integration of sukuk yields with the US Treasury yields using Vector Error Correction (VEC) models. Our results indicate that the sukuk yields are highly co-integrated with the US Treasury yields in long-term relationships. The short-term dynamics of the sukuk yields with the interest rate series is, however, complex showing bi-directional influences. We infer that the international financial markets are viewing and pricing sukuk in a manner similar to that for the conventional bonds.

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Halal Certification for Financial Products: A Transaction Cost Perspective

Cited by 12 publications

References 34 publications

Content Analysis of Shariah-Compliant Investment Equity Funds in KSA: Does Social Justice Matter?

Content Analysis of Shariah-Compliant Investment Equity Funds in KSA: Does Social Justice Matter?

Halal food certification in the UK and its impact on food businesses: a review in the context of the European Union.

Co-integration of Sukuk and Bond Yields - Evidence from Globally Placed Sukuk

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