Funds Rail

Funds Rail

Islamic fund management covering subscriptions, redemptions, fees, performance tracking, compliance, and investor reporting.

Overview

The Funds rail provides a complete platform for managing Shariah-compliant investment funds, including equity funds, Sukuk funds, real estate investment trusts (REITs), and money market funds. It handles the full fund lifecycle from launch through ongoing operations to wind-down.

Fund managers use this rail to process investor subscriptions and redemptions, calculate and collect management and performance fees, track NAV (Net Asset Value) on a daily or periodic basis, and generate regulatory and investor reports. All fund operations are subject to Shariah screening, ensuring that portfolio holdings comply with sector, financial ratio, and income purification requirements.

The rail enforces AAOIFI standards for Islamic fund accounting, including the treatment of non-permissible income (income purification), the prohibition of interest-bearing instruments, and the requirement for Shariah board certification of the fund prospectus. Distribution waterfall logic supports Mudarabah-based (profit-sharing) and Wakalah-based (agency) fee structures.

Integration with the Ledger rail provides real-time position tracking, while the Compliance rail performs automated Shariah screening of all proposed trades before execution.

Endpoints

Create Fund

POST /v1/rails/funds

const fund = await iof.funds.create({
  name: "Al-Baraka Global Equity Fund",
  type: "equity",
  structure: "mudarabah",
  base_currency: "USD",
  management_fee_bps: 150,
  performance_fee_pct: 0.1,
  min_subscription: 10000,
  shariah_advisor_id: "adv_001",
  launch_date: "2024-03-01",
});

Response:

{
  "id": "fund_xyz",
  "name": "Al-Baraka Global Equity Fund",
  "type": "equity",
  "structure": "mudarabah",
  "status": "DRAFT",
  "base_currency": "USD",
  "management_fee_bps": 150,
  "performance_fee_pct": 0.1,
  "nav_per_unit": 100.0,
  "aum": 0,
  "created_at": "2024-01-15T10:30:00Z"
}

Subscribe to Fund

POST /v1/rails/funds/:id/subscriptions

const subscription = await iof.funds.subscribe({
  fund_id: "fund_xyz",
  investor_id: "inv_001",
  amount: 50000,
  currency: "USD",
});

Redeem from Fund

POST /v1/rails/funds/:id/redemptions

Get Fund NAV

GET /v1/rails/funds/:id/nav

List Fund Holdings

GET /v1/rails/funds/:id/holdings

Calculate Fees

POST /v1/rails/funds/:id/fees/calculate

Screen Portfolio

POST /v1/rails/funds/:id/screen

Run Shariah screening on current or proposed portfolio holdings.

Create Distribution

POST /v1/rails/funds/:id/distributions

Distribute income or capital gains to unit holders.

Generate Fund Report

POST /v1/rails/funds/:id/reports

Income Purification

POST /v1/rails/funds/:id/purification

Calculate non-permissible income requiring purification.

Fund Types

Type	Description
equity	Shariah-compliant equity fund
sukuk	Fixed-income Sukuk fund
reit	Real estate investment trust
money_market	Short-term Shariah-compliant instruments
balanced	Mixed equity and Sukuk allocation
private	Private equity / venture (Musharakah)

Fund Status

Status	Description
DRAFT	Fund prospectus under review
APPROVED	Shariah board approved, pre-launch
OPEN	Accepting subscriptions
CLOSED	Closed to new subscriptions
SUSPENDED	Temporarily suspended
WINDING_UP	Fund being wound down

Integration Points

• Ledger Rail — real-time position and cash tracking for fund accounts
• Compliance Rail — automated Shariah screening of portfolio holdings
• Reporting Rail — investor statements, regulatory filings, and fact sheets
• Payments Rail — subscription and redemption payment processing
• Portfolio Rail — asset allocation and rebalancing

Webhooks

Event	Description
funds.created	Fund created
funds.subscription.received	Investor subscription received
funds.redemption.requested	Redemption request submitted
funds.nav.calculated	NAV calculation completed
funds.distribution.issued	Income distribution to investors
funds.screen.completed	Shariah screening completed
funds.purification.required	Non-permissible income detected

Standards

• AAOIFI FAS 14 - Investment Funds
• AAOIFI Shariah Standard No. 17 - Investment Sukuk
• IFSB-6 - Principles on Governance for Islamic Collective Investment Schemes
• Securities Commission Malaysia - Shariah Screening Methodology

Next Steps

• Portfolio Rail - Asset allocation management
• Compliance Rail - Shariah screening details
• Reporting Rail - Regulatory and investor reports