Similar characteristics to that of a conventional bond with the difference being that they are asset backed, a sukuk represents poportionate beneficial ownership in the underlying asset. The asset will be leased to the client to yield the return on the sukuk.
Sukuk is the Arabic name for a financial certificate but can be seen as an Islamic equivalent of bond. However fixed income, interest bearing bonds are not permissible in Islam, hence Sukuk are securities that comply with the Islamic law and its investment principles, which prohibits the charging, or paying of interest. Financial assets that comply with the Islamic law can be classified in accordance with their tradability and non-tradability in the secondary markets.