In the Name of Allāh,

the Entirely Merciful, the Especially Merciful

Praise is due to Allāh, Lord of the worlds, may the blessings and peace be upon our master Muḥammad, the last of prophets, on his family, and all his companions.

Resolution No. 59 (10/6) Financial Markets

The Council of the International Islamic Fiqh Academy of the Organization of the Islamic Conference, holding its 6th session in Jeddah, Kingdom of Saudi Arabia, on 17–23 Shaʿbān 1410h (14–20 March 1990),

Having reviewed the research papers, recommendations, and conclusions of the Financial Markets Seminar held in Rabat, Kingdom of Morocco on 20–24 Rabīʿ al-Akhir 1410 (20–24 October 1989), in collaboration between the Academy and the Islamic Research and Training Institute (IRTI) of the Islamic Development Bank (IDB), and hosted by the Ministry of Habous and Islamic Affairs of the Kingdom of Morocco,

In light of Shariah principles encouraging lawful earning and investment of wealth and savings through Islamic investments based on the principle of burden-sharing and risks bearing, such risks liability,

Given the important role of the financial markets in mobilizing the economy and stimulating investment activities, and that due importance should be given to these markets and to studying their contemporary problems in the light of Shariah will enable humanity to understand Islamic jurisprudence regarding them, in harmony with the efforts of fiqh scholars to explain Shariah rulings on financial transactions, in particular the principles governing the market and the system of Hisbah (accountability) for the supervision of markets, including giving equal importance to “secondary markets” which may facilitate investors’ return to initial markets and provide a chance to access liquidity, and promote investment by giving investors confidence that they can leave the markets if necessary,

Having examined the research papers submitted in this session concerning systems and laws of the present-day financial markets, their procedures and instruments,

Resolves

First: The Financial markets should be given due importance in order to discharge the obligation of preserving wealth and ensuring its growth, because

it leads to meet the general human needs and discharge the spiritual and mate- rial duties relating to wealth.

Second: Although the original concept of financial markets is sound and its application is very much needed in the present-day context, yet their existing structure does not present an example to carry out the objective of investment and growth of capital within the Islamic framework. This situation requires serious academic efforts to be undertaken in collaboration between the Fiqh scholars and the economists, so that it may be possible to review the financial markets’ existing systems, procedure and instruments and to amend what needs to be amended in accordance with Shariah principles.

Third: The financial markets are established through administrative and pro- cedural systems; therefore, the adoption of these systems can be attributed to the legal maxim of Al-Masalih Al-Mursalah (unrestricted public interests) which is a recognized Shariah principle and does not contravene any of its injections or principles. It therefore relates to the regulations introduced by the State author- ities, in order to organize professions and public services. If such regulations are implemented in full compliance with Shariah principles and injunctions, no one has the right to violate them or to seek ways to circumvent them.

Recommendation

To further examine the instruments and formulas used in financial markets through adequate fiqh and economic studies.12

Indeed, Allāh is All-Knowing.