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Selling short as Ijarāh with Istiḥsān and its ethical implication

For most scholars, the concept of selling short, where financial assets are sold without prior possession or ownership, transgresses Islamic principles. However, the Sharīʿah Advisory Council of the Securities Commission of Malaysia (SAC) went against the majority by permitting short selling in 2006...

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Main Authors: Sifat, Imtiaz Mohammad, Mohamad, Azhar
Format: Article
Language:English
English
English
Published: Brill 2016
Subjects:
HG4501 Stocks, investment, speculation
KBP1 Islamic law.Shariah.Fiqh
Online Access:http://irep.iium.edu.my/55104/1/Sifat%20and%20Mohamad%20%282016%29%20ALQ.pdf
http://irep.iium.edu.my/55104/7/55104_selling%20short%20as%20ijarah_WOS_Scopus.pdf
http://irep.iium.edu.my/55104/12/55104_Selling%20short%20as%20Ijar%C4%81h%20with%20Isti%E1%B8%A5s%C4%81n%20and%20its%20ethical%20implication_WoS.pdf
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http://booksandjournals.brillonline.com/content/journals/10.1163/15730255-12341324
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spelling my.iium.irep.551042017-04-18T01:23:17Z http://irep.iium.edu.my/55104/ Selling short as Ijarāh with Istiḥsān and its ethical implication Sifat, Imtiaz Mohammad Mohamad, Azhar HG4501 Stocks, investment, speculation KBP1 Islamic law.Shariah.Fiqh For most scholars, the concept of selling short, where financial assets are sold without prior possession or ownership, transgresses Islamic principles. However, the Sharīʿah Advisory Council of the Securities Commission of Malaysia (SAC) went against the majority by permitting short selling in 2006. Conventional finance points out that short selling increases liquidity, facilitates price discovery, and enables informational efficiency. Muslim scholars are facing a dilemma: on the one hand, Sharīʿah principles dictate that Islamic capital market transactions and instruments should remain devoid of elements of ambiguity and prohibited characteristics, but on the other hand, the Sharīʿah also demands that the transactions be of social utility to the participating parties. It appears that the SAC allows regulated short selling on the basis of ijārah with istiḥsān. This article strives to highlight the jurisprudential issues regarding short selling and contribute to an Islamic angle on the ethical implications affecting this phenomenon. Brill 2016-09 Article REM application/pdf en http://irep.iium.edu.my/55104/1/Sifat%20and%20Mohamad%20%282016%29%20ALQ.pdf application/pdf en http://irep.iium.edu.my/55104/7/55104_selling%20short%20as%20ijarah_WOS_Scopus.pdf application/pdf en http://irep.iium.edu.my/55104/12/55104_Selling%20short%20as%20Ijar%C4%81h%20with%20Isti%E1%B8%A5s%C4%81n%20and%20its%20ethical%20implication_WoS.pdf Sifat, Imtiaz Mohammad and Mohamad, Azhar (2016) Selling short as Ijarāh with Istiḥsān and its ethical implication. Arab Law Quarterly, 30 (4). pp. 357-377. ISSN 0268-0556 http://booksandjournals.brillonline.com/content/journals/10.1163/15730255-12341324 DOI: 10.1163/15730255-12341324
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
English
English
topic HG4501 Stocks, investment, speculation
KBP1 Islamic law.Shariah.Fiqh
spellingShingle HG4501 Stocks, investment, speculation
KBP1 Islamic law.Shariah.Fiqh
Sifat, Imtiaz Mohammad
Mohamad, Azhar
Selling short as Ijarāh with Istiḥsān and its ethical implication
description For most scholars, the concept of selling short, where financial assets are sold without prior possession or ownership, transgresses Islamic principles. However, the Sharīʿah Advisory Council of the Securities Commission of Malaysia (SAC) went against the majority by permitting short selling in 2006. Conventional finance points out that short selling increases liquidity, facilitates price discovery, and enables informational efficiency. Muslim scholars are facing a dilemma: on the one hand, Sharīʿah principles dictate that Islamic capital market transactions and instruments should remain devoid of elements of ambiguity and prohibited characteristics, but on the other hand, the Sharīʿah also demands that the transactions be of social utility to the participating parties. It appears that the SAC allows regulated short selling on the basis of ijārah with istiḥsān. This article strives to highlight the jurisprudential issues regarding short selling and contribute to an Islamic angle on the ethical implications affecting this phenomenon.
format Article
author Sifat, Imtiaz Mohammad
Mohamad, Azhar
author_facet Sifat, Imtiaz Mohammad
Mohamad, Azhar
author_sort Sifat, Imtiaz Mohammad
title Selling short as Ijarāh with Istiḥsān and its ethical implication
title_short Selling short as Ijarāh with Istiḥsān and its ethical implication
title_full Selling short as Ijarāh with Istiḥsān and its ethical implication
title_fullStr Selling short as Ijarāh with Istiḥsān and its ethical implication
title_full_unstemmed Selling short as Ijarāh with Istiḥsān and its ethical implication
title_sort selling short as ijarāh with istiḥsān and its ethical implication
publisher Brill
publishDate 2016
url http://irep.iium.edu.my/55104/1/Sifat%20and%20Mohamad%20%282016%29%20ALQ.pdf
http://irep.iium.edu.my/55104/7/55104_selling%20short%20as%20ijarah_WOS_Scopus.pdf
http://irep.iium.edu.my/55104/12/55104_Selling%20short%20as%20Ijar%C4%81h%20with%20Isti%E1%B8%A5s%C4%81n%20and%20its%20ethical%20implication_WoS.pdf
http://irep.iium.edu.my/55104/
http://booksandjournals.brillonline.com/content/journals/10.1163/15730255-12341324
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score 13.211869

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