Who are we?
COMPANY OVERVIEW
Sabiq Advisory FZE is a company licensed by the Dubai World Trade Centre Authority (DWTCA) with company registration No. 995. It is based in the Dubai World Trade Centre (DWTC) freezone, in Dubai UAE.
Understanding the Issues and Finding a Solution
Pursuant to various Shariah audit exercise reports by Shariah auditors, it is found that the common mistakes/issues as identified are in relation to the execution of the overall commodity Murabaha processes.
Common issues include:
- Incorrect sequencing of the 3 transaction legs forming part of the overall commodity Murabaha process flow whereby often, the 2 transactions with the brokers (leg 1 and leg 3) are completed first prior to the transaction between the financing parties (leg 2).
- Incorrect position of contracting parties in the transaction with the broker i.e. either acting as Principal or Agent.
- Error in the identification of commodity ownership whereby broker documentation often state that ownership of commodities transfer on the full payment date (value date) whereas from a Shariah perspective, it should be transferred on the trade date (conclusion of offer and acceptance date).
- Unsigned documents to evidence the agreement by the parties of the transaction terms.
- Issues with commodities as used such as metals
The above issues may result in repercussions posed by the entity due to the Shariah non compliance event such transactions becoming void ab initio and the need to purify related income to charity due to it being declared Shariah non compliant. This may also render the audit result unsatisfactory.
Further, entities will face substantial risks as operational, compliance, legal and most importantly, reputational risks if the entity is unable to perform the activities as per the relevant Shariah requirements and therefore, breaching its fiduciary obligations to its stakeholders especially customers
Ensuring Shariah Compliance & Eliminating Shariah Audit Issues
Correct Commodity Murabaha transaction process flow for each Commodity Murabaha Transaction entered:
All of Murabaha Processes are done in the correct sequence i.e as per the below order:
Executed Schedule
Form of Transaction Request (Schedule of Master Murabaha Agreement) executed
Broker documentation
Purchase of commodities from Broker Seller completed evidenced by the holding certificate issued with correct details
Executed Schedule
Form of Offer Letter and Acceptance (Schedule of Master Murabaha Agreement) executed.
Broker documentation
Sale of commodities to Broker Buyer completed.
Addressing the AAOIFI Shariah Standards Requirement
Standard 30: Monetization (Tawarruq)
4/7 The client shall not delegate the Institution or its agent to sell, on his behalf, a commodity that he purchased from the same Institution and, similarly, the Institution shall not accept such delegation. If, however, the regulations do not permit the client to sell the commodity except through the same Institution, he may delegate the Institution to do so after he, actually or constructively, receives the commodity.
4/8 The Institution should not arrange proxy of a third party to sell, on behalf of the client, the commodity that the client purchased from the Institution.
4/9 The client shall not sell the commodity except by himself or through an agent other than the Institution, and shall duly observe the other stipulations
Our clients and credentials
We are proud to showcase our portfolio of clients and credentials
Commodity Murabaha Agency & Execution Services
The value propositions
Sabiq Services Advantages
Ensuring AAOIFI Shariah standards compliance
No same Murabaha party agency as per AAOIFI restrictions under standard 30: clause 4/7 – 4/9 making the solution entirely AAOIFI compliant. AAOIFI compliance is mandatory in countries like UAE and Bahrain and the preferred standard in most other countries in Middle East and South East Asia
Smoother internal operations
Sabiq acts as agent of both Murabaha parties to ease, smooth and expedite overall execution process within minutes
Internal operation light
Execution done by a third party with minimal costs added. Institution only needs to send instruction
Cost effective
Lower brokerage costs due to Sabiq’s internal brokerage rates with commodity brokers
Shariah experts
CM performed by Shariah experts who are familiar with Shariah requirements. Mitigates any potential Shariah risks which is common in a CM transaction
Meet The Team
Maya Marissa Malek
CEO
Maya Marissa Malek is currently the CEO and Executive Director, Global Shariah Advisory at Amanie
Advisors.
Nur Izzaathirah Rosli
Head of operations
Nur Izzaatirah Rosli is the Head of Operations at Sabiq Advisory. Her role with Sabiq is to provide
Commodity Murabaha execution and Shariah advisory services.
Yuzly Yusoff
Senior Consultant
Yuzly is a seasoned professional with a combined experience of more than 25 years both as a banker
and an international Islamic Banking consultant.
Samsuhaili Samsudin
Legal Department
Samsuhaili is in charge of legal and compliance of Sabiq Advisory
Certificate of Incorporation
The registrar of Companies of Dubai World Trade Centre Authority
Commodity Murabaha
PRE T-3
Appoint Sabiq as Agent
The Client appoints Sabiq to act as the agent (or sub-agent, as the case may be) of the Client and for its related affiliates/subsidiaries/SPV companies/clients (as authorized) to provide Murabaha trade execution service.
T-3 to T-1
Send trade instructions and share agreements with Sabiq
The Client will notify Sabiq via email on the proposed Murabaha transaction date and details, i.e., 1) Transaction Principal Amount 2) Profit Amount 3) Deferred Payment Amount 4) Deferred Payment Date and 5) Payment Schedule (Word version) prior to the CM trade.
The Client will also share the Master Murabaha Agreement (MMA), Commodity Purchase Agency Agreement and other relevant agreements with Sabiq.
T-3 to T-1
Send pre-filled Schedule of MMA for details verification
Sabiq will provide the Client’s pre-filled Schedule (Form of Transaction Request and Form of Offer Letter and Acceptance) of MMA.
Verify and confirm details with Sabiq
The Client shall verify and confirm the details, particularly the transaction principal amount, profit amount and deferred payment amount.
T
Murabaha Request by the Client (Schedule of MMA)
Sabiq, on behalf of Purchaser, would request the Seller to purchase the commodities and promise to purchase the same commodities from the Seller.
Execute commodity purchase transaction from Commodity Seller in the system
Sabiq will undertake Murabaha transactions through an online commodity trading platform on the transaction clay.
Sabiq, on behalf of the Seller, will buy the commodities from Commodity Seller. As a result, the system will generate Certificate 1 – Certificate of Purchase by Seller.
Execute Offer and Acceptance Letter (Schedule of MMA)
Sabiq, on behalf of the Seller, will make an offer to sell the commodities to the Purchaser.
Accept Sabiq's offer to sell as Seller's Agent (in the same platform)
Sabiq, on behalf of the Purchaser will accept to buy the commodities from the Seller.
Sale of Commodities to Commodity Purchaser
Sabiq, on behalf of the buyer, will execute the sale of commodities to a Commodity Purchaser. The system will generate Certificate 3 — Certificate of Sale.
T to T+1
Send confirmation of sale to the Client
After the execution, Sabiq will provide:
- the executed Murabaha request form
- Certificate of Purchase by Seller (Certificate 1)
- Executed Offer and Acceptance letter
- Certificate of Sale (Certificate 3)
Sabiq Advisory
Office 16, FD-06-04, SRT –FLR 07, Sheikh Rashid Tower,
Dubai World Trade Centre, Dubai UAE
copyright © 2023 Sabiq Advisory