CA-8.3.14
The capital treatment of Musharakah Sukuk is based on the intent of the underlying investments in Musharakah that can be categorised as follows:
(a) For private commercial enterprise to undertake trading activities in, for example, commodities, the RW must be based on the applicable underlying assets as set out in the market risk section of Section CA-5.1;
(b) For private commercial enterprise to undertake business venture or project (other than Subparagraph CA-8.3.14(a)), the RW is measured according to either the simple RW method or the supervisory slotting criteria approach;
(c) Income-producing Musharakah investments through leasing of jointly-owned real estate or movable assets such as cars to third parties by means of Ijara must carry the RW of the counterparty — that is, the lessee; and
(d) Income-producing Musharakah investments with Murabahah subcontracts carry the RW of the Murabahah.
January 2015