Sukuk Rail

Islamic trust certificate (bond) endpoints for capital markets issuance, trading, settlement, and lifecycle management.

Overview

The Sukuk rail provides:

End-to-end sukuk issuance and structuring
Secondary market trading and order management
Settlement and clearing integration
Corporate actions (coupon distribution, redemption, call/put)
Real-time valuation and pricing
Shariah compliance checks at every lifecycle stage

Sukuk (plural of sakk) are Shariah-compliant trust certificates that represent proportional undivided ownership in an underlying tangible asset, usufruct, or pool of assets. Unlike conventional bonds, sukuk holders have a beneficial ownership interest in the underlying asset rather than a debt obligation. Returns are derived from the performance of the underlying asset, not from interest.

Sukuk are the primary instrument for Islamic capital markets, used by sovereigns, corporates, and financial institutions to raise funds in a Shariah-compliant manner. The global sukuk market exceeds $800 billion in outstanding issuance.

Sukuk Types

The IOF platform supports all major sukuk structures recognized by AAOIFI Shariah Standard No. 17:

Type	Code	Description
Ijarah Sukuk	`ijarah`	Certificates representing ownership in a leased asset. Returns come from rental income.
Murabaha Sukuk	`murabaha`	Certificates funding a cost-plus sale. Returns come from the profit margin on the sale.
Mudarabah Sukuk	`mudarabah`	Certificates representing a trust-based partnership. Returns come from the profit of the venture.
Musharakah Sukuk	`musharakah`	Certificates representing equity participation. Returns come from the partnership profit share.
Istisna Sukuk	`istisna`	Certificates funding a manufacturing or construction contract. Returns from the completed asset.
Salam Sukuk	`salam`	Certificates funding forward purchase of commodities. Returns from the sale of delivered goods.
Wakalah Sukuk	`wakalah`	Certificates where an agent (wakil) manages a pool of assets on behalf of certificate holders.
Hybrid Sukuk	`hybrid`	Certificates backed by a pool combining multiple contract types (e.g., ijarah + murabaha + equity).

Sub-Rails

The Sukuk rail is organized into six sub-rails, each responsible for a distinct phase of the sukuk lifecycle.

Issuance

Handles the structuring, approval, and primary issuance of new sukuk.

Create Sukuk Issuance

POST /v1/rails/sukuk/issuances

const issuance = await iof.sukuk.issuances.create({
  name: "Al Baraka Ijarah Sukuk Series 2025-A",
  sukuk_type: "ijarah",
  issuer_id: "org_issuer_001",
  currency: "USD",
  target_amount: 500_000_000,
  minimum_denomination: 100_000,
  tenor_months: 60,
  expected_return_rate: 0.055,
  underlying_asset: {
    type: "real_estate",
    description: "Grade A commercial office tower, DIFC, Dubai",
    appraised_value: 650_000_000,
    appraised_by: "Knight Frank",
    appraisal_date: "2025-01-10",
  },
  spv: {
    name: "Al Baraka Sukuk Ltd",
    jurisdiction: "DIFC",
    trustee_id: "org_trustee_001",
  },
  offering_type: "public",
  listing_exchange: "NASDAQ_DUBAI",
  shariah_advisor_id: "org_shariah_board_001",
  distribution_frequency: "semi_annual",
});

Response:

{
  "id": "suk_iss_abc123",
  "name": "Al Baraka Ijarah Sukuk Series 2025-A",
  "sukuk_type": "ijarah",
  "status": "DRAFT",
  "issuer_id": "org_issuer_001",
  "currency": "USD",
  "target_amount": 500000000,
  "minimum_denomination": 100000,
  "tenor_months": 60,
  "expected_return_rate": 0.055,
  "underlying_asset": {
    "type": "real_estate",
    "description": "Grade A commercial office tower, DIFC, Dubai",
    "appraised_value": 650000000
  },
  "spv": {
    "name": "Al Baraka Sukuk Ltd",
    "jurisdiction": "DIFC",
    "trustee_id": "org_trustee_001"
  },
  "offering_type": "public",
  "listing_exchange": "NASDAQ_DUBAI",
  "distribution_frequency": "semi_annual",
  "isin": null,
  "created_at": "2025-06-15T10:30:00Z"
}

Get Sukuk Issuance

GET /v1/rails/sukuk/issuances/:id

List Sukuk Issuances

GET /v1/rails/sukuk/issuances

Query parameters:

Parameter	Type	Description
`status`	`string`	Filter by status (`DRAFT`, `PENDING_APPROVAL`, `OPEN`, `CLOSED`, etc.)
`sukuk_type`	`string`	Filter by sukuk type (`ijarah`, `murabaha`, `musharakah`, etc.)
`currency`	`string`	Filter by currency code
`issuer_id`	`string`	Filter by issuer organization
`limit`	`number`	Results per page (default: 25, max: 100)
`cursor`	`string`	Pagination cursor

Update Sukuk Issuance

PUT /v1/rails/sukuk/issuances/:id

Submit for Shariah Review

POST /v1/rails/sukuk/issuances/:id/submit-review

Approve Issuance

POST /v1/rails/sukuk/issuances/:id/approve

Open Subscription

POST /v1/rails/sukuk/issuances/:id/open-subscription

Close Subscription and Allocate

POST /v1/rails/sukuk/issuances/:id/close-subscription

Cancel Issuance

DELETE /v1/rails/sukuk/issuances/:id

Trading

Handles secondary market order management for sukuk certificates.

Place Trade Order

POST /v1/rails/sukuk/trades

const trade = await iof.sukuk.trades.create({
  issuance_id: "suk_iss_abc123",
  direction: "buy",
  quantity: 50,
  price_per_unit: 101.25,
  currency: "USD",
  counterparty_id: "org_buyer_001",
  settlement_date: "2025-07-20",
  execution_venue: "NASDAQ_DUBAI",
});

Response:

{
  "id": "suk_trd_def456",
  "issuance_id": "suk_iss_abc123",
  "direction": "buy",
  "status": "PENDING",
  "quantity": 50,
  "price_per_unit": 101.25,
  "total_value": 5062500,
  "accrued_profit": 12500,
  "clean_price": 101.25,
  "dirty_price": 101.5,
  "currency": "USD",
  "counterparty_id": "org_buyer_001",
  "settlement_date": "2025-07-20",
  "execution_venue": "NASDAQ_DUBAI",
  "created_at": "2025-07-17T14:22:00Z"
}

Get Trade

GET /v1/rails/sukuk/trades/:id

List Trades

GET /v1/rails/sukuk/trades

Cancel Trade

DELETE /v1/rails/sukuk/trades/:id

Settlement

Handles delivery-versus-payment (DvP) settlement of sukuk trades and coupon distributions.

Initiate Settlement

POST /v1/rails/sukuk/settlements

const settlement = await iof.sukuk.settlements.create({
  trade_id: "suk_trd_def456",
  settlement_type: "dvp",
  settlement_date: "2025-07-20",
  custodian_id: "org_custodian_001",
});

Get Settlement

GET /v1/rails/sukuk/settlements/:id

List Settlements

GET /v1/rails/sukuk/settlements

Confirm Settlement

POST /v1/rails/sukuk/settlements/:id/confirm

Fail Settlement

POST /v1/rails/sukuk/settlements/:id/fail

Corporate Actions

Handles coupon (profit distribution) payments, redemptions, calls, puts, and other lifecycle events.

Create Corporate Action

POST /v1/rails/sukuk/corporate-actions

const action = await iof.sukuk.corporateActions.create({
  issuance_id: "suk_iss_abc123",
  action_type: "profit_distribution",
  record_date: "2025-06-30",
  payment_date: "2025-07-15",
  amount_per_unit: 2750,
  currency: "USD",
});

Response:

{
  "id": "suk_ca_ghi789",
  "issuance_id": "suk_iss_abc123",
  "action_type": "profit_distribution",
  "status": "ANNOUNCED",
  "record_date": "2025-06-30",
  "payment_date": "2025-07-15",
  "amount_per_unit": 2750,
  "total_distribution": 13750000,
  "eligible_holders": 245,
  "currency": "USD",
  "created_at": "2025-06-20T09:00:00Z"
}

Get Corporate Action

GET /v1/rails/sukuk/corporate-actions/:id

List Corporate Actions

GET /v1/rails/sukuk/corporate-actions

Execute Corporate Action

POST /v1/rails/sukuk/corporate-actions/:id/execute

Corporate Action Types

Type	Code	Description
Profit Distribution	`profit_distribution`	Periodic coupon payment to certificate holders
Partial Redemption	`partial_redemption`	Redemption of a portion of outstanding certificates
Final Redemption	`final_redemption`	Full redemption at maturity
Early Redemption	`early_redemption`	Issuer-initiated early buyback (call)
Put Exercise	`put_exercise`	Holder-initiated early redemption (put)
Asset Substitution	`asset_substitution`	Replacement of underlying asset with equivalent asset
Dissolution Event	`dissolution_event`	Triggered by default or underlying asset impairment

Valuation

Handles mark-to-market pricing, yield calculations, and portfolio valuation for sukuk positions.

Get Current Valuation

GET /v1/rails/sukuk/valuations/:issuance_id

const valuation = await iof.sukuk.valuations.get("suk_iss_abc123");

Response:

{
  "issuance_id": "suk_iss_abc123",
  "valuation_date": "2025-07-17",
  "clean_price": 101.25,
  "dirty_price": 101.5,
  "accrued_profit": 0.25,
  "yield_to_maturity": 0.0523,
  "modified_duration": 3.42,
  "spread_over_benchmark": 0.0125,
  "benchmark": "SOFR_5Y",
  "currency": "USD",
  "source": "market",
  "updated_at": "2025-07-17T16:00:00Z"
}

Get Historical Valuations

GET /v1/rails/sukuk/valuations/:issuance_id/history

Bulk Portfolio Valuation

POST /v1/rails/sukuk/valuations/bulk

Compliance

Handles Shariah compliance screening, ongoing monitoring, and regulatory reporting specific to sukuk.

Run Compliance Check

POST /v1/rails/sukuk/compliance/check

const check = await iof.sukuk.compliance.check({
  issuance_id: "suk_iss_abc123",
  check_type: "full_review",
});

Response:

{
  "id": "suk_cmp_jkl012",
  "issuance_id": "suk_iss_abc123",
  "check_type": "full_review",
  "status": "COMPLIANT",
  "checks": [
    {
      "rule": "underlying_asset_tangibility",
      "result": "PASS",
      "detail": "Underlying real estate asset verified as tangible"
    },
    {
      "rule": "asset_ownership_transfer",
      "result": "PASS",
      "detail": "True sale opinion confirmed for SPV transfer"
    },
    {
      "rule": "profit_loss_sharing",
      "result": "PASS",
      "detail": "Distribution linked to asset performance"
    },
    {
      "rule": "prohibited_activities_screening",
      "result": "PASS",
      "detail": "No haram activities in asset pool"
    },
    {
      "rule": "tradability_ratio",
      "result": "PASS",
      "detail": "Tangible asset ratio 78% exceeds 33% threshold"
    }
  ],
  "shariah_standard": "AAOIFI_SS_17",
  "reviewed_at": "2025-07-17T12:00:00Z"
}

Get Compliance Status

GET /v1/rails/sukuk/compliance/:issuance_id

List Compliance Reports

GET /v1/rails/sukuk/compliance

Contract Status Lifecycle

Sukuk issuances follow a multi-stage lifecycle:

Status	Description
`DRAFT`	Issuance created, structuring in progress
`PENDING_SHARIAH_REVIEW`	Submitted to Shariah advisory board for fatwa
`SHARIAH_APPROVED`	Shariah board has issued an approval fatwa
`PENDING_REGULATORY`	Submitted to regulatory authority for approval
`REGULATORY_APPROVED`	Regulatory approval obtained
`SUBSCRIPTION_OPEN`	Primary subscription open for investors
`SUBSCRIPTION_CLOSED`	Subscription period ended, allocation in progress
`ISSUED`	Certificates issued and allocated to investors
`ACTIVE`	Sukuk is live, periodic distributions being paid
`MATURED`	Reached maturity, final redemption complete
`DISSOLVED`	Early dissolution triggered (default or dissolution event)
`CANCELLED`	Issuance cancelled before completion

DRAFT
  --> PENDING_SHARIAH_REVIEW
      --> SHARIAH_APPROVED
          --> PENDING_REGULATORY
              --> REGULATORY_APPROVED
                  --> SUBSCRIPTION_OPEN
                      --> SUBSCRIPTION_CLOSED
                          --> ISSUED
                              --> ACTIVE
                                  --> MATURED
                                  --> DISSOLVED
  --> CANCELLED (from any pre-ACTIVE status)

Shariah Compliance Rules

Sukuk must adhere to the following Shariah principles enforced by the platform:

Tangible Asset Backing: Sukuk must represent ownership in tangible assets, usufructs, or services. Pure monetary receivables cannot be the sole underlying asset for tradable sukuk.
True Sale Requirement: The underlying asset must be genuinely transferred to the SPV (Special Purpose Vehicle). A true sale legal opinion is required.
No Guaranteed Returns: The issuer cannot guarantee a fixed return. Profit distributions must be linked to the performance of the underlying asset. Expected return rates are indicative, not guaranteed.
Prohibition of Interest (Riba): No component of the sukuk structure may involve interest-based lending or borrowing. Purchase undertakings must be at face value or market value, not at a predetermined premium.
Prohibition of Excessive Uncertainty (Gharar): The underlying asset, rental rates, profit-sharing ratios, and all material terms must be clearly specified at issuance.
Permissible Underlying Activities: The underlying asset or business must not involve haram activities (alcohol, gambling, pork, conventional interest-based finance, weapons, tobacco).
Tradability Ratio: For sukuk to be freely tradable on secondary markets, the tangible asset component must represent at least 33% of the total asset pool (per majority scholarly opinion). If the pool is predominantly receivables, sukuk must be traded at par value.
Asset Substitution Restrictions: Replacement of underlying assets requires Shariah board approval and must maintain equivalent or better Shariah compliance standing.
Dissolution Event Handling: In case of default, certificate holders share losses proportional to their ownership. The trustee must act in the best interest of holders, and any recovery must follow Shariah-compliant procedures.
Periodic Shariah Audit: Active sukuk issuances must undergo periodic (at least annual) Shariah audit confirming ongoing compliance.

Webhooks and Events

Event	Description
`sukuk.issuance.created`	New sukuk issuance draft created
`sukuk.issuance.submitted_for_review`	Issuance submitted for Shariah review
`sukuk.issuance.shariah_approved`	Shariah board approved the issuance
`sukuk.issuance.regulatory_approved`	Regulatory authority approved the issuance
`sukuk.issuance.subscription_opened`	Primary subscription period opened
`sukuk.issuance.subscription_closed`	Subscription closed, allocation starting
`sukuk.issuance.issued`	Certificates issued and allocated
`sukuk.issuance.cancelled`	Issuance cancelled
`sukuk.trade.placed`	Secondary market trade order placed
`sukuk.trade.matched`	Trade order matched with counterparty
`sukuk.trade.settled`	Trade settlement completed
`sukuk.trade.cancelled`	Trade order cancelled
`sukuk.trade.failed`	Trade settlement failed
`sukuk.corporate_action.announced`	Corporate action announced (coupon, redemption)
`sukuk.corporate_action.executed`	Corporate action payments distributed
`sukuk.corporate_action.dissolution`	Dissolution event triggered
`sukuk.valuation.updated`	Mark-to-market valuation updated
`sukuk.compliance.check_completed`	Compliance check finished
`sukuk.compliance.breach_detected`	Shariah compliance breach detected

Integration Points

The Sukuk rail connects to other IOF rails and services:

Integration	Rail/Service	Purpose
Ledger	`ledger`	Double-entry accounting for all sukuk transactions and distributions
Compliance	`compliance`	Shariah screening, AML/KYC checks on issuers and investors
Clearing	`clearing`	Trade netting and clearing for secondary market transactions
Settlement	`settlement`	DvP settlement coordination with custodians
Reporting	`reporting`	Regulatory reporting (IFSB, central bank, exchange disclosures)
Analytics	`analytics`	Portfolio analytics, yield curves, risk metrics
Treasury	`treasury`	Investment management and liquidity planning
Notifications	`notifications`	Investor notifications for corporate actions and compliance events
Audit	`audit`	Full audit trail for all sukuk lifecycle events
Governance	`governance`	Shariah board approval workflows and voting
KYC	`kyc`	Investor eligibility verification and accreditation checks
Webhooks	`webhooks`	Real-time event delivery to external systems

Ledger Integration

Every sukuk transaction creates double-entry ledger entries via TigerBeetle:

// Issuance: investor subscription
// DR: Cash/Bank Account (SPV receives funds)
// CR: Sukuk Certificate Liability (investor holds certificates)

// Profit Distribution:
// DR: Rental Income / Profit Account
// CR: Distribution Payable to Certificate Holders

// Redemption at Maturity:
// DR: Sukuk Certificate Liability
// CR: Cash/Bank Account (principal returned to holders)

Compliance Integration

// Automatic compliance checks at key lifecycle points
const hooks = [
  {
    trigger: "pre_issuance",
    checks: ["shariah_structure_review", "asset_tangibility"],
  },
  {
    trigger: "pre_trading",
    checks: ["tradability_ratio", "holder_eligibility"],
  },
  {
    trigger: "periodic",
    checks: ["ongoing_shariah_audit", "asset_impairment"],
  },
  { trigger: "pre_dissolution", checks: ["dissolution_shariah_review"] },
];

AAOIFI Standards References

The Sukuk rail is built to comply with:

Standard	Title	Relevance
SS-17	Investment Sukuk	Core standard governing all sukuk structures
FAS 28 (superseded)	Ijarah and Ijarah Muntahia Bittamleek	Accounting for ijarah-based sukuk
FAS 33	Investment in Sukuk, Shares, and Similar Instruments	Accounting classification and measurement
FAS 34	Financial Reporting for Sukuk-holders	Reporting from the investor perspective
GS-1	Guiding Principles on Shariah Governance	Governance framework for Shariah boards
IFSB-19	Disclosure Requirements for Islamic Capital Markets	Disclosure standards for sukuk offerings
IFSB-22	Revised Capital Adequacy Standard	Capital treatment of sukuk holdings

Key requirements from AAOIFI SS-17:

Sukuk must not represent debt; they represent ownership in assets, usufructs, or services
The underlying assets must be Shariah-compliant
Sukuk holders must bear the risk of ownership
Purchase undertakings at maturity must be at face value (not a guaranteed premium)
The manager/issuer may receive a performance incentive only if actual profit exceeds expected return
Trading of sukuk representing predominantly receivables must follow rules of bay al-dayn (sale of debt)

Internal Services and Functions

The Sukuk rail is implemented across the following internal packages and services:

Package/Service	Purpose
`packages/contracts-core/src/schemas/capital-markets/sukuk.ts`	Zod schemas for sukuk data validation
`services/rail-api/src/rails/sukuk/`	Sukuk rail route handlers and business logic
`packages/webhook-core/src/events/treasury-events.ts`	Sukuk-related webhook event definitions
`packages/webhook-core/src/events/contract-events.ts`	Contract type enum including `SUKUK`
`registry/contracts/sukuk-offering.json`	Sukuk offering circular contract template registry entry
`packages/db-core/prisma/`	Database schema for sukuk issuances, trades, and positions

Key Internal Functions

// Issuance structuring
sukukIssuanceService.create(params: CreateSukukIssuanceInput): Promise<SukukIssuance>
sukukIssuanceService.submitForReview(id: string): Promise<SukukIssuance>
sukukIssuanceService.approve(id: string, fatwaRef: string): Promise<SukukIssuance>
sukukIssuanceService.openSubscription(id: string): Promise<SukukIssuance>
sukukIssuanceService.closeAndAllocate(id: string): Promise<AllocationResult>

// Trading
sukukTradingService.placeOrder(params: PlaceTradeOrderInput): Promise<SukukTrade>
sukukTradingService.matchOrder(orderId: string): Promise<MatchResult>
sukukTradingService.cancelOrder(orderId: string): Promise<SukukTrade>

// Settlement
sukukSettlementService.initiate(tradeId: string): Promise<SukukSettlement>
sukukSettlementService.confirm(settlementId: string): Promise<SukukSettlement>

// Corporate actions
sukukCorporateActionService.announce(params: CorporateActionInput): Promise<CorporateAction>
sukukCorporateActionService.execute(actionId: string): Promise<DistributionResult>

// Valuation
sukukValuationService.getCurrentPrice(issuanceId: string): Promise<SukukValuation>
sukukValuationService.getHistory(issuanceId: string, range: DateRange): Promise<SukukValuation[]>
sukukValuationService.bulkValuate(issuanceIds: string[]): Promise<SukukValuation[]>

// Compliance
sukukComplianceService.runCheck(issuanceId: string, checkType: string): Promise<ComplianceResult>
sukukComplianceService.getStatus(issuanceId: string): Promise<ComplianceStatus>

Admin Portal Mapping

The Sukuk rail surfaces in the Admin Portal under the following sections:

Admin Portal Section	Path	Description
Sukuk Issuances	`/admin/sukuk/issuances`	List, create, and manage sukuk issuances
Issuance Detail	`/admin/sukuk/issuances/:id`	Full issuance detail with lifecycle timeline
Shariah Review Queue	`/admin/sukuk/shariah-review`	Pending Shariah review queue for approvals
Trading Blotter	`/admin/sukuk/trades`	Secondary market trade monitoring
Settlement Dashboard	`/admin/sukuk/settlements`	Settlement status and exception management
Corporate Actions	`/admin/sukuk/corporate-actions`	Schedule and execute distributions and redemptions
Compliance Monitor	`/admin/sukuk/compliance`	Ongoing compliance status and breach alerts
Valuation Dashboard	`/admin/sukuk/valuations`	Mark-to-market pricing and portfolio views

API Explorer Mapping

All Sukuk endpoints are available in the API Explorer at /api-explorer/sukuk with:

Interactive request builder for each endpoint
Live response previews with actual API responses
Authentication token management
Request/response history
Schema documentation auto-generated from OpenAPI spec

Next Steps

Murabaha Rail - Cost-plus financing
Ijarah Rail - Islamic leasing
Musharakah Rail - Partnership finance
Treasury Rail - Treasury and investment management
Compliance Rail - Shariah compliance framework
Ledger Rail - Double-entry accounting
Contracts Rail - General contract management