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Sharia contravention

A new sharia-compliant structure that controversially employs a total return swap has attracted vehement criticism from structurers and scholars alike. Critics say the structure circumvents the spirit of sharia and spells the end of Islamic finance, but are such products just a useful innovation? Matt Cameron reports

The Islamic financing industry has become embroiled in a vicious debate over an innovative type of sharia-compliant structure that has been used as an underlying for structured products issuance. The structure allows investors to access returns from assets that are prohibited under sharia by using a total return swap in the form of an Islamic contract called a Wa'd (promise), so that the final

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