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AAOIFI |
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The
Accounting and Auditing Organization for Islamic Financial
Institutions (hereinafter referred to as AAOIFI) is an
Islamic international autonomous non-profit making
corporate body that prepares accounting, auditing,
governance, ethics and Shari'a standards for Islamic
financial institutions. |
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Al-Mudharabah
(profit sharing) |
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Refers
to an agreement made between a party, who provides the
capital and another party (entrepreneur), to enable the
entrepreneur to carry out business projects, which will be
on a profit-sharing basis, according to pre-determined
ratios agreed upon earlier. Under this concept, the
agreement could be between a depositor (capital provider)
and the Bank (as the entrepreneur) or between the Bank (as
the provider of capital) and an entrepreneur. In the case
of losses, the losses are borne by the provider of the
funds. |
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Al-Wakala
(nominating another person to act) |
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Refers
to a situation, where a person nominates another person to
act on his behalf. |
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Balanced
Funds |
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Hold a
balanced portfolio of both stocks and bonds. |
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Bond |
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A
written promise to repay a loan plus interest, usually
more than one year after the bond is issued. Investors buy
bonds from a company or government entity, essentially
loaning the company or government that money. |
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Bond
Funds |
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Invest
exclusively in various kinds of bonds. |
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Certificate
of Deposit (CD) |
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A
time deposit with a specific maturity evidenced by a
certificate. |
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Clearing |
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This
represents a central setting-off claims and liabilities
which are credited and/or debited respectively in the
course of the settlement process. Clearing may be affected
on a gross or net basis.
Cross border settlement of securities trades between two
market participants belonging to different settlement
organizations. |
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Closed-end Funds |
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These Funds
operate with a fixed number of shares outstanding and do not
regularly issue new shares of stocks. |
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Custody |
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This
means the safe custody, monitoring and administration of
securities instruments independent of their physical place
of custody. Apart from the safekeeping and processing of
securities with settlement commitments, custody also
includes the collection of interest income and dividends,
the dissemination of information on
entrepreneurial-political measures as well as claiming of
withholding tax and other comprehensive financial
services. |
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CSD/ICD |
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Central
securities depository/International central securities
depository. National or international clearing or
settlement organizations, which enable the settlement of
securities transactions. |
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Dividends |
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Payments
corporations make to their shareholders. The per-share
amount is determined by corporate earnings. |
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Dividend
Cleansing |
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The
percentage of distributed dividend that has originated
from Islamic ally-unacceptable sources and activities. The
distribution of this percentage to charitable causes
enables the income of a fund to be purified. |
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Equity
Funds |
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This
is a scheme that invests only in equity. |
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Financial
Instrument |
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There
are two basic types: (1) a debt instrument, which is a
loan with an agreement to pay back funds with interest;
(2) an equity security, which is share or stock in a
company |
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Fund
Manager |
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The
individual responsible for making portfolio decision for a
mutual fund |
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Global
Funds |
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A
mutual fund investing in stocks or bonds through out the
world. |
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Growth Funds |
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The objective
of this fund is long-term growth and capital gains. |
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Growth Funds &
Income Funds |
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Seek a balance
between current income and long term capital gains. |
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International
Funds |
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Invest mostly
on foreign securities. |
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Load and No
Load Funds |
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Load charges
are commissions, the investor pays when buying shares in the
fund. |
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Net Asset
Value (NAV) |
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Is calculated
at least once a day and represents the underlying value of a
share of stock in particular mutual fund. |
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Open - end
Funds |
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Investors buy
their shares from, and sell them back to mutual fund itself. |
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Organized
Securities Exchanges |
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Are
centralized institutions in which forces of supply and
demands for certain securities are traded on the exchanges. |
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Over the
Counter Market (OTC) |
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the OTC
markets is the result of intangible relationship among
purchasers and sellers of securities. |
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Primary Market |
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Are when a new
issues of securities are brought to the public. |
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Secondary
Market |
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Exist for
securities to be traded after the have been originally
issues on the primary market |
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Sector Funds |
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restrict its
investments to a particular sector or segment of the market. |
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