Huge strides have been made over the past 20 years in Islamic finance, so that something which was once small scale and barely known outside specialist circles is now a globally recognised sector of the financial markets. Derivatives have lagged behind Islamic banking and bond issuance – and they remain controversial. Some Islamic financial players believe derivatives will never be compatible with Shari’ah law. But the swelling interest in Islamic hedging structures and the wide variety of initiatives being worked on suggest the opposite – that an Islamic derivatives market is emerging that will eventually offer an extensive range of services. The world of Islamic derivatives is arcane and fragmented – nobody contacted by FOW was able to give an indication of the size of the market. But most participants agree that there is noticeable growth every year, which, although disrupted by the financial crisis, looks set to continue when...