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Masters of Science-Islamic Finance (MSIF)
The Industry Standard
Statement of BIBF
The growth story of Islamic Finance is now a world-wide phenomenon. Not only is Islamic Finance experiencing tremendous rates of growth in the traditional Muslim markets, but in the traditional financial centers such as Hong Kong, United Kingdom, Singapore and Japan
The Masters of Science – Islamic Finance is the culmination of substantial industry based research and feedback to create a unique program that provides participants with a strong background in both the science of conventional finance and the dynamics of Islamic Finance as practiced today.
This program builds on the success of the existing DePaul and BIBF relationship to create a program that builds on each partner’s core specialization. DePaul University and the highly reputed Kellstadt Graduate School of Business is responsible for the Finance specialist stream while the Center for Islamic Finance at BIBF is responsible for compiling and delivering the Islamic Finance specialist stream. We at BIBF are proud of this initiative and believe it is the best that the industry has to offer: The Industry Standard.
The broader aim of this program was to create the next generation of leaders in Islamic Finance, equipped with the specialist knowledge set and skills that arise out of combining the science of conventional finance and Islamic Finance.
We hope that the best organizations and individuals in the region will put themselves forward to participate in this industry leading program.
Garry Muriwai, Director, BIBF
Statement of DePaul
Over the course of the last decade, the Islamic Finance segment of the financial services industry has experienced a phenomenal rate of growth. This, in turn, has created a significant demand for finance professionals who are
• Equipped with a deep understanding of the nuances of the field,
• Able to contribute to the design and the trading of sharia-compliant sophisticated financial products, and
• Well-versed in the workings of the markets within which these activities take place.
DePaul University and its Faculty of Finance are delighted to play a major role in addressing these needs. Our innovative Master of Science in Islamic Finance, offered jointly with the Center for Islamic Finance at BIBF, builds on the strength of our Master of Science in Finance program and the unique capabilities of the BIBF faculty. The core curriculum of our program provides you with a sophisticated framework for a deep understanding of arbitrage, interest rates, risk and return, fair value, value formation and other important financial theories.
The increasing sophistication of financial markets, and an ever-expanding set of instruments traded within its increasingly globalized setting, demand such a deep understanding. Success within these markets requires the mastery of an array of competencies. These include a theoretically sound and applied understanding of:
• how the regional and global markets of the world evolve,
• the nature and the role of innovation within and across the markets,
• the governing mechanisms needed for the well-functioning of the markets,
• the process of innovation and its interaction with regulation,
• the principles governing valuation of different forms of assets, contingent assets and derivatives,
• the various forms of risk and how to manage such risks,
• strategic financial decision making,
• financial analysis,
• management of financial services firms,
• complex and tailor-made forms of financing,
• resource allocation,
• corporate governance, and
• corporate restructuring.
The core curriculum is designed to provide you with the requisite knowledge, and the know-how, to successfully tackle these issues. It will be delivered by a faculty known for its dedication to teaching and well recognized for its academic accomplishments. Most members of the faculty have had significant work experience in key corporate positions prior to joining DePaul. Many are renowned scholars within their field of research and enjoy national and international reputations. They include well-published and often-cited researchers, authors of best selling textbooks and editors of highly respected academic journals. Most members of the faculty have either been awarded or been nominated for recognition as exceptional teachers.
Building upon this foundation, the students of the program will be provided the opportunity to acquire a deep and a thorough understanding of the Islamic economic and financial systems and the workings of its markets. Once such a mastery is acquired, the graduates of the program will be a position to contribute to the process of building and managing wealth in a sharia-compliant manner.
I wish you the best in this and all your endeavors.
Ali Fatemi
Alumni Professor and Chairman
DePaul University
Why Master Science - Islamic Finance (MSIF)?
The Master of Science- Islamic Finance program provides an opportunity for highly motivated students to develop the dual knowledge and skills base necessary to understand modern conventional and Islamic financial markets, instruments and decision-making. Complementing DePaul’s existing reputation in Finance, BIBF has sourced globally recognized experts in Islamic Finance to deliver the Islamic Finance courses. The program is structured to develop financial management professionals with the knowledge and proficiency to:
• Create sophisticated solutions to financial problems
• Structure and evaluate new financial instruments for both Islamic and conventional institutions
• Leverage resources for optimal profitability and productivity
• Develop strategic financial objectives
• Seize new business opportunities
• Mitigate corporate risk
• Improve investment decision making
• Analyze technical financial material
• Understand the technicalities of Islamic commercial and investment banking
MSIF Program Structure
The MSIF Degree is structured based on two specializations and hence includes topics to be covered in both the conventional finance stream and in the Islamic Finance stream. These are given below:
7 Finance Courses
ECO 555 Economics for Decision Making
FIN 555 Financial Management
FIN 523 Investment Analysis
FIN 524 Financial Statement Analysis
FIN 512 Commercial Banking
FIN 562 Derivatives and Risk Management
FIN 662 Advanced Derivatives and Risk Management
5 Islamic Finance Courses
Islamic Economics, Jurisprudence and Ethics
Accounting, Auditing and Governance for Islamic Financial Institutions
Islamic Commercial Banking
Islamic Investment Banking
Islamic Treasury, Capital Markets and Risk Management
MSIF Curriculum
Students complete the Master of Science - Islamic Finance by taking a total of twelve courses as specified above. The Program starts in March 2009 and runs for the consecutive 15 months. July and August are summer holidays and December is a winter holiday. There are no classes in Ramadan. Courses are offered once per month and run for a maximum of 2½ weeks. Students meet with DePaul professors 3 times per week: 2 evenings (6-9.30 pm) and mornings in 3 consecutive weekends (8.00am to 3.00pm). Weekends are Friday and Saturday. The Schedule for the Islamic Finance stream may slightly vary from the format stipulated.
In addition, students will be required to attend the AAOIFI Annual Conference on Islamic Banking and the AAOIFI Annual Shari’a Conference held during the year.
Enrollment Requirements
• Completion of DePaul's Kellstadt Graduate School of Business application for admission.
• The equivalent of a U.S. bachelor's degree from a recognized academic institution.
• Official transcripts from each undergraduate, graduate and professional school attended.
• Minimum TOEFL iBT score of 90 is expected. If applicants do not wish to take the TOEFL, IELTS at the British Council offers an alternative. 6.5-7.0 score is expected.
• GMAT results sent directly by the Educational Testing Service. If GMAT is not taken by time of application, a DePaul Math test is administered at BIBF to accompany the application; but a GMAT score is required before the end of the program.
• At least 1 reference letter from employer and/or professor (in English language).
• Resume (in English language).
• Typed personal statement (recommended).
• Application Fee BD 30.000 is required at the time of applying
• BD 10.000 late fee for processing any application received after the posted deadline.
• 6 passport photos, 1 copy of passport & CPR.
Cost consideration
The tuition for the MSF program is BD 10,000. Tuition is payable in three installments during the course of study.
Special Consideration for DePaul MBA and MSF Graduates
Individuals with an MBA or MSF degree or students currently enrolled in the MBA or MSF program may have up to six of their courses count toward the requirements of the Master of Science in Islamic Finance degree. The exact number of courses that can be double-counted in this manner depends upon the specific coursework of each individual and will be determined in consultation with a DePaul Advisor.
Detailed Description of Courses:
FINANCE COURSES
ECO 555 Economics for Decision Making
This course provides students with an opportunity to apply microeconomic principles to managerial decision-making. These principles include those underlying the theories of consumer choice, production and cost as they relate to decisions made by firms and households. Specific topics include consumer demand analysis and estimation; elasticity; production theory; cost structure and estimation; profit maximization; and the effect of market structure on pricing, output and profit. PREREQUISITE(S): GSB 420
FIN 555 Financial Management
A study of the major decision areas faced by the corporate financial manager and their relationship to the goals of the firm's owners. Specific topics include capital budgeting, capital structure and the cost of capital, dividend policy, and current asset management. PREREQUISITE(S): ACC 500 and ECO 555 or equivalents and GSB 420
FIN 523 Investment Analysis
This course provides an overview of the investment environment for the institutional money manager. The market mechanism, market equilibrium, the relationship between risk and return and the valuation of various investment instruments are investigated. PREREQUISITE(S): FIN 555.
FIN 524 Financial Statement Analysis
This course develops financial analysis skills from the view of an outsider using a corporations publicly available financial statements. Techniques such as commonsizing, ration analysis, decomposition and the use of a comprehensive DuPont Model are used as a basis to teach analytical thought processes necessary to make projections for a company based on its financial statements. The use of spreadsheets as an analytical tool will be strongly emphasized. PREREQUISITE(S): FIN 555.
FIN 512 Commercial Banking
The purpose of the course is to analyze the role of commercial banks in the financial system. The present structure of banking will be studied with particular emphasis on the relationship between commercial banking practices and economic stabilization goals. Issues in bank asset management, liability management and capital adequacy will be presented. Finally, new dimensions in banking will be considered. PREREQUISITE(S): FIN 555.
FIN 562 Derivatives and Risk Management
This course is designed as an introduction to derivative instruments; their characteristics, their pricing, the market's infrastructure, trading mechanics, and applications. The course introduces the binomial pricing model, the Black & Scholes continuous time pricing model, the associated properties i.e. "the Greeks." and forward pricing. The course examines the characteristics and market infrastructure for each of the four derivative instruments: forwards, futures, options, and swaps. Then trading strategies and hedging applications for each of these instruments are discussed. The course concludes with an introduction to Value at Risk. PREREQUISITE(S): FIN 555.
FIN 662 Advanced Derivatives and Risk Management
This course is designed to be an advanced course that focuses on the pricing models for the four derivative instruments: forwards, futures, options and swaps. Fixed income modeling as it is related to swaps and caps also will be considered. The first part of the course is devoted to an in depth examination of the various pricing models: discrete, continuous time, as well as Monte Carlo simulation. Each model's properties are derived and discussed in detail. These models are then applied to a range of realistic pricing situations which include swaps, exotic options, credit derivatives and complex Value at Risk problems. PREREQUISITE(S): FIN 555 & 562
ISLAMIC FINANCE COURSES
Islamic Economics, Jurisprudence and Ethics
This course will introduce students to Shari’a laws related to commerce and trade (Fiqh Al-Muamalat) and how they are applied in the international commercial environment. Students will develop an appreciation of the economics of Islamic Finance as it relates to the ethical underpinnings and worldview set forth in Shari’a law. Students will learn how to apply Shari’a principles to financial transactions they will encounter in Islamic Financial Institutions. This course will also foster an appreciation of the debates on contentious issues in contemporary Islamic Finance transactions. [NOTE: This course is a pre-requisite for the Islamic Finance series of subjects. It may be taken in conjunction with other Finance courses, however students will require this knowledge as the foundation for all of the other Islamic Finance courses.]
Islamic Commercial Banking
This course will provide students with a substantial overview of the commercial banking operations of Islamic Financial Institutions, covering three distinct areas: retail, trade and corporate banking services. In the retail aspect of the course, students will be introduced to the different Islamic products available for retail banking including deposit and financing products, credit cards and banking services. The course will focus on the structuring and operational process of the products. The course will also feature a heavy bias towards contemporary case studies drawn from a host of Islamic financial institutions operating across the globe attempting to showcase innovative and original Islamic products and structures. By the end of the course, students will appreciate the dynamics of creating innovative products blending both consumer behaviour and Shari’a compliance paradigms. The course will also provide a detailed exposition of trade finance, as it is exercised by Islamic banks and the unique practical issues associated with undertaking such activities, including preparation and execution of documentation that complies with both international trade law and Shari’a. Finally, the course will outline the contracts and processes utilized by Islamic financial institutions to offer banking services such as commitments and guarantees, foreign exchange and payment services. PRE-REQUISITE(S): ISLAMIC ECONOMICS, JURISPRUDENCE AND ETHICS
Islamic Investment Banking
This course will provide a thorough overview of Islamic Investment Banking as practiced today, with a leadership view on potential improvements and innovations in the Islamic Investment landscape. Essentially, the course is divided into three major sections: the investment bank operational structure, the deal execution process, and the particular quantitative and qualitative characteristics and methodologies utilised to understand the asset classes conducive to Islamic investment. In doing so, this course also expose students to the principal modes of investment that IFIs employ due to the asset backed nature of IFIs, covering all types of Equity Investment, (Corporate Acquisitions- Private Equity, Real Estate, Asset based transactions) and Project Finance. Each component of the course will also feature the relevant application of Shari’a structuring of financing. PRE-REQUISITE(S): ISLAMIC ECONOMICS, JURISPRUDENCE AND ETHICS
Accounting, Auditing and Governance for Islamic Financial Institutions
This course will provide a comprehensive overview of the governance and accountability dynamics of an Islamic financial institution. The course will expose students to the need for and rationale of the governance mechanisms and rules associated with Islamic Financial Institutions (accounting, auditing and Shari’a). In addition, the course will also provide students with a thorough practical grounding of the AAOIFI accounting standards, with a comparative analysis with IFRS standards, where applicable. By the end of the course, students will be able to apply the former standards to analyse the financial statements of Islamic Financial Institutions and the extent of compliance with governance norms and rules. PRE-REQUISITE(S): ISLAMIC ECONOMICS, JURISPRUDENCE AND ETHICS, ISLAMIC COMMERCIAL BANKING AND ACC 500
Islamic Treasury, Risk Management and Capital Markets
This course will provide students with an overview of the wholesale operations of Islamic financial institutions, including inter-bank placements, capital markets operations and products, and risk management for Islamic financial institutions. The course provides a detailed exposition of the specific risks unique to Islamic financial institutions, and how all risks (including those that are not unique to IFIs) are mitigated/can be mitigated within the parameters of Shari’a. The structuring of a number of unique and innovative risk management products will be discussed, the likes of Islamic profit rate swaps, Islamic foreign exchange options and Islamic hedging mechanisms. Finally, the course will look into the developments in Islamic capital markets and contemporary issues related to sukuk issuance and trading. PRE-REQUISITE(S): ISLAMIC ECONOMICS, JURISPRUDENCE AND ETHICS, ISLAMIC COMMERCIAL BANKING, ISLAMIC INVESTMENT BANKING AND ACC 500.
DePaul University
DePaul University is a private institution of higher education and research in Chicago, Illinois, U.S. Founded by the Vincentians in 1898, the university takes its name from the 17th century French priest who valued philanthropy, Saint Vincent de Paul. The student body consists of about 23,500 students (approximately 15,000 undergraduate and 8,500 graduate/law), making DePaul one of the 10 largest private universities in the United States; it is the largest private university in Illinois.
Kellstadt Graduate School of Business
Since 1912, DePaul has been providing an excellent education in business. Our mission and commitment to be a leader means we change and update our programs frequently to keep pace with the dynamics of global business. We have established a tradition of excellent service to the business community of the Chicago area. There are more than 19,000 Kellstadt alumni who are making contributions around the world.
The Kellstadt Graduate School of Business is accredited by AACSB International - The Association to Advance Collegiate Schools of Business. That makes us one of only a limited percentage of U.S. business schools to be recognized by this prestigious -- and standard-setting -- organization.
The Kellstadt Graduate School of Business offers the Master of Business Administration (MBA) and Master of Science (MS) degrees. DePaul University’s part-time Master of Business Administration (MBA) program has been ranked sixth in the nation by U.S.News & World Report in the magazine’s 2009 graduate degree rankings, issued in March 2008. DePaul’s career-focused MBA program for working professionals has earned a top-10 rating more than a dozen times in the magazine’s annual rankings.
DePaul's MBA program was rated among the top three in Chicago's highly competitive business school market, according to the first-ever ranking of local MBA programs by Crain's Chicago Business in October 2006.
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