Equity-Based Sukuk： Robust Performance of Musharakah and Mudharabah Contract

The purpose of this study is to analyze the robust performance of equity-based sukuk in Malaysia, that is, Musharakah and Mudharabah contract. Accounting and Auditing Organization for Islamic Financial Institutions （AAOIFI）, as an international standard-setting organization for Islamic finance, raised an issue that 85% issuances of Musharakah and Mudharabah sukuk have breached the shariah rulings and do not comply with Islamic principles （AAOIFI, 2002）. Consequently, the performance of equity-based sukuk in Malaysia was affected. This study used a secondary data for size of issuances which are gathered from Bank Negara Malaysia （BNM）＇s Bond Info website and Securities Commission （SC） website. The performance of equity-based sukuk, either Musharakah or Mudarabah, is robust in the study year period of 2000-2012 as regards their sizes of issuances.

Reflections on China＇s equity crowd-funding and guard against the risk of problems

At present, China＇s equity crowd-funding platform development like a raging fire, its business model is financing online for small and medium-sized enterprises, many investors to participate in the same project, while equity in return for a platform to receive a certain percentage of service charge. However, no related domestic regulatory measures, divorced from a legal gray zone, improper operation may become a pool of funds to engage in illegal fund-raising, illegal securities activities. Therefore, this article is based on two domestic representative platform-＂Angercrunch＂and ＂Dajiatou＂ to raise public equity, the comparative study of the problem currently facing a series of recommendations, including the introduction of regulation, improve the legal system, conduct investor risk education and self-education, etc.

Signals in equity‑based crowdfunding and risk of failure

This study investigates signal validity in equity-based crowdfunding by examining whether signals that increase crowd participation are associated with higher postoffering success.Post-offering success is measured as the probability of survival.We use a hand-collected data set of 88 campaigns with over 64,000 investments and 742 updates from a well-established and leading German equity-based crowdfunding platform,Companisto.We find that indicating that the chief executive officer holds a university degree and a higher number of business-related updates are associated with a lower risk of failure,which is in line with recent research on offering success.The number of updates on external certification,promotions,and the team is associated with a higher risk of failure.In contrast to recent findings on offering success,we find that the equity share offered is positively related to post-offering success,whereas a high number of large investments or updates on campaign development are accompanied by a higher probability of failure.Our results provide guidance for entrepreneurs and investors regarding which signals are worth sending or using.Furthermore,these results suggest that investors are partly using wrong signals and challenge the rationality and wisdom of the crowd.

Financial reporting fraud and CEO pay-performance incentives

Because prior studies find mixed results on the relation between CEOs’pay performance incentives and a firm’s likelihood of financial reporting fraud,we restudy their relationship using innovative research methods.First,we concentrate on incentives from granting options rather than equity-based incentives.Second,we emphasize vested options,disregarding unvested option holdings,and take the logarithm transformation of option incentives.Third,we analyse the impact of option incentives on future financial reporting irregularities.Using this innovative approach as well as a full sample and a matched sample,we find that an increase in executives’option incentives raises the likelihood of financial reporting violations.Moreover,the effect of option incentives on financial reporting fraud is moderated by auditor effort.In addition,we find that another proxy for the measurement of executives’option incentives,namely,the number of vested options by executives,is highly correlated with the CEO’s vested stock option sensitivity.