Criteria for determining the Shari'ah compliance of shares: a fiqhi analysis
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As the Islamic finance industry continues to gain popularity in the financial sphere, the number of faithful investors who are interested in Shari'ah-compliant avenues for their investments also continues to increase. One of the most important of these is the equity market. However, it is evident in today's world that it is hard to find a joint stock company whose activities are completely compliant to Shari'ah principles and rulings. As a share of a company represents all the activities and underlying assets of the company, the Shari'ah noncompliance issue can emerge in the share. While the primary activities of a company are Shari'ah-compliant, its peripheral activities may be impermissible from the Shari'ah viewpoint. Meanwhile, the assets of the company can also be in the form of cash, debt, goods, usufruct or rights, which can raise the issue of trading ribawi (interest-based) items. Thus, the study addresses the issue of Shari'ah compliance and tradability of shares that represent a mixture of halal (permissible in Islamic law) and haram (impermissible in Islamic law) activities and assets.
Shares , Shari'ah compliance , Sales , Qualitative methodology
Mohamad, S., Muhammad, M., Habib, F., & Salim, K. (2015). Criteria for determining the Shai'ah compliance of shares: a fiqhi analysis. ISRA International Journal of Islamic Finance, 7(2), 171-179.