ABSTRACT
This chapter focuses on issues related to more complex scenarios involving IFSs, specifically structured IFSs and IFS markets themselves. It begins with structured IFSs, discusses the relevance of financial engineering to basic IFSs. The chapter then discusses how financial engineering is actually done as well as some examples of structured IFS. Financial engineering is a broad topic, the insights for which are also applicable to IFSs. A common example is the securitization of various asset types, yielding 70sukuk which can be more flexibly used for portfolio management. The basis of asset securitization using IFCs is through the use of partnership contracts. Usmani describes the securitization process as beginning with the identification of the asset to be securitized and then issuing the certificates of ownership for it. Azmat et al. consider the matter from an approach similar to that developed for credit ratings agencies, namely that parties providing compliance certification might compromise quality in the presence of competition.
