In all societies, there is some group of owner’s funds and cash savings who don’t have any desire or ability to invest directly in profitable economic activities. On the other hand, many entrepreneurs with knowledge, experience and potential do not have the financial resources required for investment. Money and capital markets with using a variety of financial instruments, play a significant intermediary role between these two groups.
The main goals of Central Asset Management company are establishment and management SPVs, in order to facilitate the implementation of intermediary actions".
Mudraraba is a word meaning having trade with the capital provided by another party. As a term, it refers to a situation in which one person (owner) gives an asset (capital) to another party (agent) and obtains a certain share of the return of the capital. The return of Mudraraba Sukuk absolutely depends on the profit of that commercial activity.
Although the profit of commercial activities could be predicted to a certain degree, but in practice, it depends on a variety of different factors that might go in opposition to the forecast. As a result, the return of these Sukuk a variable and is only definite at the end of the financial period.
Shi'a scholars, in contract to Sunni scholars, limit Mudraraba contracts to commerce, and thus this type of contract in Iran is only signed with regard to commercial activities.
Different kinds of Mudraraba Sukuk:
1. Special Mudraraba Sukuk: are offered for special commercial activities and the return will be divided after the end of that activity.
2. Public Mudraraba Sukuk with maturity dates: in these Sukuk, the originator issues securities with certain maturity dates (e.g three or five years) and with certain financial periods (e.g. three, six or twelve months) and embarks on trading using the obtained capital. In such cases, no certain activity is usually determined for the originator.
3. Public Mudraraba Sukuk without maturity dates: with regard to activity and payment of return, these Sukuk work the same the Public Mudraraba Sukuk with maturity dates, the only difference is that they do not have a maturity date and will be valid until sequestration of the Sukuk. The profits will be paid at each financial period.