ISLAMIC FINANCIAL INSTRUMENT

PART I

PRELIMINARY

A. Background

Islam encourages people to work or trade, and avoid activities begging in the search for wealth. Humans need wealth as a tool to meet the needs of daily living including unuk meet some commands of God as donation, zakat, hajj, the war (jihad), and so forth.

A treasure in the lawful and good saying apabla true intention, purpose and proper way or the means of acquiring it is also true, in accordance with the guidelines set out in the Qur'an and the Sunnah as.

Transactions that are prohibited in Islam is usury, fraud, gambling, gharar, hoarding, monopoly, engineering requests etc. Thus the prohibition of usury, risk sharing, a ban on speculative activities, the sanctity of contracts, business activities must be in accordance Sharia is Islamic financial system as provided by the Al-Quran and As-Sunnah of the community to carry out activities in the world of Islamic economics.

CHAPTER II

DISCUSSION

1. ISLAMIC FINANCIAL INSTRUMEN

A. Islamic Bonds.

Islamic Bonds is a long-term securities based on sharia principles issued by the Issuer to the Bondholders Syariah which require the Issuer to pay revenue to the Syariah Bondholders form of profit sharing / margin / fee and repay the bond at maturity. Akad which can be used in the issuance of Islamic Bonds include Mudharabah (Muqaradhah / Qiradh), Musharaka, Murabaha, Salam, Istishna, and Ijara. Type of business Issuer must not conflict with Islamic principles. Income (yield) shared investment Issuer to Bondholders must be cleared from the non kosher. Income (yield) obtained in accordance Syariah Bondholder contract used. In the case of Islamic Bonds Mudaraba or Musharaka contract with shared revenue represents revenue sharing. In terms of the contract of sale such as Murabaha, Salam, or Istishna, shared revenue is margin. Whereas in the case of Ijarah, shared revenue is fee (rent) of the leased asset. Islamic Bonds following the ownership transfer contract-contract used.

B. Mudharabah.

Mudharabah financing is financing provided by Own Funds (Shahibul Maal) to Entrepreneurs (Mudharib) for a productive business. In mudharabah, Shahibul Maal finance 100% of the project (business) while acting as business Mudharib Enterprises. Duration of effort, ordinances refunds, and sharing of benefits determined in advance by agreement of both parties. Mudharib may perform a variety of businesses that have been agreed and in accordance with the Shariah, and Shahibul Maal did not participate in the management of the business but have the right to conduct training and supervision. Shahibul Maal bear all the losses resulting from mudharabah unless Mudharib make mistakes intentional, negligent, or otherwise violate the agreement. Business management fees charged to Mudharib.

C. Akad Musharaka

Musharaka financing is financing based on the principles of cooperation between two or more parties to undertake a particular business, in which each party contributes funds with the stipulation that the benefits and risks will be shared in accordance with the agreement. Provisions concerning the results of operations should be stated clearly to avoid differences and disputes on the allocation of time for the results or at the time of termination Musharaka. Sharing system operating results should be stated clearly. Profits must be divided proportionally and no amount determined in advance for one or more partners. However, if agreed upon, if the gain exceeds a certain amount, excess or a portion of such excess may be given to a partner or more. Losses should be shared among the partners in proportion to their respective shares in venture capital.

D. Akad Murabaha

Murabaha financing is financing to buy (hold) a giver of goods where the financing will buy the goods that have been agreed upon (the object of financing) to then act as a seller to sell to the Beneficiary financing (which acts as a Buyer) valued at the purchase price plus an agreed profit. Funding Recipient will pay the price of the goods (purchase price plus profit) agreed on a specific period of time and in a certain way according to the agreement. After the sale, the goods that are objects belong Seller financing (Funding Recipients) and the corresponding free use of the goods, including for resell. In the case of Funding Recipients (Buyer) to sell the goods before the payment period expires, the Payee is not obliged to settle the payment before the payment period expires. To ensure that the Funding Recipient (Buyer) settle their obligations, the Giver Financing (Seller) can determine the collateral of Funding Recipients.

E. Akad Salam

Salam financing is financing the purchase (procurement) of goods where the financing Giver ordered goods and pay the upfront price of the goods to the Seller (Beneficiary financing) that will hold the item, and then resold to buyers who will pay the price of the goods in accordance with the agreement to the Giver of financing. Funding providers benefit from the difference between the price of goods paid in advance at the price paid by the Buyer.

F. Akad Istishna

Istishna financing is financing the purchase (procurement) of certain goods (excluding ships, buildings, etc.) where the Employer Funding will order certain items to certain criteria and conditions agreed between the Recipient Financing (Buyer) to the Seller (Manufacturer or Builder Goods). Funding Employer shall pay to the Seller and will receive a lump sum payment and a certain period of time. Funding providers benefit from the difference between the price of goods paid to the Seller with the amount of the price paid Recipient Financing.

G. Akad Ijarah

Ijarah financing agreement is a contract of transfer of rights to (benefit) of an item (maal) or services (charity) in a certain time through lease payments or wages without being followed by the transfer of ownership of the goods themselves. Berakad parties consist of rental giver (the party who has obtained / controlled goods or providers / services authorities) and Tenant (parties who take advantage of the goods / services), where the object of the contract is the lease payments and the benefits of the goods / services. The parties shall ensure that the object of the contract because he is a pillar that must be met in Ijarah. Benefits must be declared and can be specifically identified, including a period of availability and usage benefits. Benefits must be Shariah-compliant and ability to meet the benefit must be real as well as Shariah-compliant. Duration and terms of payment of the rent should not be associated with a period of usage benefits. Rental providers are required to provide goods / services that are rented, to bear the maintenance cost of goods, guarantee if there are defects in the goods leased. Tenants are required to pay rent and is responsible for maintaining the integrity of the goods leased and minor maintenance costs, but is not responsible for the damage was not due to violation of terms of use or due to negligence.

2. RELATED DEFINITIONS OF ISLAMIC BONDS

• Akad Ijarah: Ijarah signed by the Issuer and the Trustee as the basis for the transfer of benefits Ijarah places.

• Ijarah Object: the benefits to be received by the Issuer, derived from certain assets are stated in detail in Akad Ijarah. To maintain continuity can be determined Akad Ijarah Ijarah Object Replacement is similar benefits that can be derived from other assets are stated in detail in Akad Ijarah.

• Fee Ijarah: the amount of money that must be paid by the Issuer as Beneficiaries Ijarah Holders Syariah Ijarah Bonds as Ruler places Ijarah connection with Bonds Syariah Ijarah the form Instalment Fee Ijarah, Time Fee Ijarah, and Compensation Losses delay (if any) to be paid by the Issuer from time to time during the validity of Syariah Ijarah Bond Trustee Agreement.

• Installment Ijarah Fee: part of the Ijarah Fee to be paid by the Issuer to the Bondholders Syariah Ijarah return for the benefits received by the Issuer on the basis Akad Ijarah, which payment will be made in accordance with the provisions of the Syariah Ijarah Bond Trustee Agreement.
• The rest of the Ijarah Fee: Fee Ijarah part of which has not been paid in the form of Ijarah installment fee, which shall be paid by the Issuer to the Bondholders Syariah Ijarah to fulfill its obligations under Akad Ijarah, where the value of Time Fee Ijarah is generally equal to the value of Syariah Ijarah Bonds.

• Ijarah Fee Reserve Fund: fund which shall be established gradually by the Issuer that is specifically used as a backup on Ijarah Fee payment, either in the form Instalment Fee Time Fee Ijarah and Ijarah, in accordance with the Syariah Ijarah Bond Trustee Agreement.

• Compensation Losses Due to Late Payment Fee / Share-Result: the amount to be paid by the Issuer to the Bondholders Sharia as a result of the negligence of the Company delays AAU meet payment obligations Fee / Share -Search which in this case there was no element of fault and the Syariah Bondholders Syariah Bondholder harmed by the negligence or delay. The amount of Delay Compensation Losses are calculated based on the number of days negligence / delay and shall be calculated based on the Fee / Share-relevant results.

• Document Issuance of Sharia: documents consisting of a) Akad-Akad Sharia, b) Bond Trustee Agreement Sharia, c) Recognition of debt, d) Underwriting Agreement Islamic Bonds, e) Agreement Payment Agent, f) Registration Agreement Bonds Sharia in the Central Securities Depository, and g) Preliminary Securities Listing Agreement.

• Bond Trustee Agreement Sharia: the agreement made between the Issuer and the Trustee for the benefit of the Islamic Bonds and duty to represent the interests of the Bondholders Syariah well where it is stated the rights of Bondholders Sharia and the rights and obligations of the Trustee to take legal action, both inside and outside the court, with regard to the interests of the Bondholders Sharia on the implementation of the rights of the Bondholders in accordance with Syariah requirements

Islamic bond issuance, with due regard to the provisions of the Agreement the Trustee as well as by the legislation in force in the Republic of Indonesia and the rules on public offerings and bond.

• Trustee: the agency that has a business license Trustee of the authorized institution, which was entrusted to represent the interests of the Bondholders Sharia to acquire the rights of the Bondholders in accordance with Syariah requirements Issuance of Sharia.

• Recognition Debt: deed made by the Issuer for the benefit of Syariah Bondholders represented by Trustee that is intended to provide certainty fee or profit share payments to Holders Islamic Bonds with regard to the provisions in the National Sharia Board Fatwa.

• Sharia Bond Underwriting Agreement: the agreement made between the Issuer and Underwriter in which the aforementioned states will conduct Syariah Bonds with certain conditions and Underwriting states shall ensure the implementation of Sharia Bonds with certain conditions.

• Paying Agent Agreement: the agreement made between the Issuer and the Central Securities Depository on payment of fee or profit share in the form Instalment Fee / Share-Results, or Time Fee / Share-Results or Islamic bond principal.

• Depository and Settlement: is a self-regulating organization institutions in accordance with the Capital Market Law in Islamic bond issuances served as Paying Agent in accordance with the Paying Agent Agreement and administering the Bonds in accordance with the Islamic Sharia Bonds Registration Agreement.

CHAPTER III

COVER

Transactions that are prohibited in Islam is usury, fraud, gambling, gharar, hoarding, monopoly, engineering requests etc. Thus the prohibition of usury, risk sharing, a ban on speculative activities, the sanctity of contracts, business activities must be in accordance Sharia is Islamic financial system as provided by the Al-Quran and As-Sunnah of the community to carry out activities in the world of Islamic economics.

The financial system "interest free" (prohibition of interest) do not only look at the interaction between the factors of production and the behavior of the economy as it is known in the conventional financial system, but also must menyeimbankan various elements of the ethical, moral, social and religious dimension to improve equity and justice towards society prosperous thoroughly. Through a system of cooperation for the results there will be sharing of risks. Risks that arise in financial activities not only on the responsibility of the recipient capital or businessmen, but also the risk accepted by financiers.

Thus, the principle of Islamic financial instruments mengacuh on the same principle willing willingly.

Note:

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