In an Islamic capital market, business transactions are carried out in a manner that does not conflict with the inner voice of Muslims and the religion of Islam. The Islamic capital market is free from activities that are not permitted by Islam such as interest (riba), excessive uncertainty (Gharar), gambling (Maysir), short selling and financing any activity considered harmful to society. The Islamic capital market is a segment of the general capital market in Malaysia and plays a vital role in the financial development of Malaysia. The Islamic capital market is parallel to the conventional capital market. The Shariah Advisory Board was established to screen, evaluate and identify the procedure for managing listed shares for organizations listed and required to be listed on Bursa Malaysia for their Shariah compliant status. Currently, there are various capital market products available to Muslims who are only looking to invest and transact in the Islamic capital market. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an original essay An example of an Islamic capital market product is Sukuk Finance or also known as Islamic bonds. The Accounting and Auditing Organization defines financial sukuk as certificates of equal value representing undivided shares in the ownership of tangible assets, usufructs (the legal right to use and enjoy profits and enjoy profits from something owned by others) and services or (in ownership of) the assets of particular projects or particular investment activities. Sukuk is about a financing provider owning real assets and earning a return from those assets. With Sukuk, certificates are issued that are linked to an underlying tangible asset and also transfer the risks and rewards of ownership. The underlying asset is managed on behalf of the Sukuk holders. Sukuk financing could be suitable for securitization of rental portfolio. There are two types of Sukuk which are Asset-Based Sukuk (Sukuk Al-Ijarah) and Asset-Backed Sukuk. An asset-based sukuk raises funds whose principal is covered by the capital value of the asset, but repayments to sukuk holders are not directly funded by these assets. An asset-backed sukuk raises funds whose principal is secured by the capital value of the asset, but profits and repayments to sukuk holders are directly funded by these assets. This is the same arrangement as securitization in which the assets are transferred to a special purpose vehicle and the returns and repayments are directly funded by the income from the assets. In simpler terms, Asset Based Sukuk finances the acquisition of assets or the raising of capital through sale and leaseback. The first step is for the sukuk holder to subscribe by paying an issue price to a special purpose vehicle (SPV) company. In return, the SPV issues certificates indicating the percentage it holds in the SPV. The SPV uses the funds collected and purchases the asset from the debtor also known as the seller and in return the SPV receives the property. Then, the SPV, acting as lessor, leases the asset back to the debtor under an Ijarah agreement. The debtor or tenant pays rent to the SPV, the latter being the owner and lessor of the property. The SPV then makes periodic dispersions (rent and capital) to sukuk holders. A Sukuk backed by