RESOLUTION NO. (59/10/6)


Quote-The Council of the Islamic Fiqh Academy, in its sixth session, held
in Jeddah,  Kingdom of Saudi Arabia, from 17 to 23  Sha'baan,1410H
(corresponding to 14 - 20 March, 1990),

After having studied  the papers and recommendations presented and
conclusions reached at in the seminar held in Rabat(Morocco) on 20-24
Rabi'ul Thani 1410 H (October 20-24, 1989) on the subject of "Financial
markets", in cooperation between the Academy and the Islamic Research and
Training Institute(IRTI) of the Islamic Development Bank, and hosted by the
Ministry of Endowments and Islamic Affairs of the Kingdom of Morocco.

And in the light of the rule recognized in Shari'a that encouragement
should be directed towards lawful earning and investment of savings through
Islamic modes of investment based on the principle of sharing burdens and
bearing the risks of liabilities,

And in  view of the vital role played by the financial markets in
mobilizing the economy and stimulating the investment operations,

And realizing the fact that giving due importance to these markets and
studying their problems in the light of Shari'a can fulfill the need of
introducing the guidance of Islamic Fiqh to the contemporary problems, and
it conforms to the efforts exerted by Muslim jurists in explaining the
rulings of Shari'a on financial transactions, and particularly on the
principles governing the market and the system of  "Hisbah" introduced to
supervise the market  operation; and that an equal importance should be
given to the "secondary markets" which facilitate to investors the re-entry
to initial markets and provide access to liquidity, and encourage
investment by promoting confidence in the investors that they can leave the
markets whenever they need to do so.

And after studying the papers presented to explain the working system of
the existing financial markets, their procedure and the different
instruments used therein,


First:The financial markets should be given due importance in order to
discharge the obligation of preserving capital and ensuring its growth,
because it leads to fulfill the general human needs and discharge the
spiritual and material duties relating to capital.
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 "Fuqaha" (Muslims jurists) and the economists, so
that it may be possible to review the existing systems with its procedure
and instruments and to amend what needs amendment in the light of the
recognized principles of Shari'a.
Third:The financial markets are established through administrative and
certain procedural systems and the adoption of these systems can be
attributed to the rules of general expediency ("Al Masalih Al-Mursalah")
which is a recognized principle in Shariah and does not contravene any of
its injunctions or principles.  It relates therefore to the regulation
introduced by the authorities of the State, in order to organize
professions and public utility services.  If such regulations are carried
out in complete confromity with the Islamic principles and injunctions, no
one has the right to violate them or to seek devices to circumvent them.

And recommends:

To provide a complete picture by conducting adequate research and studies
from Fiqh and economic perspectives on the instruments and modes used in
financial markets.

Verily, Allah is All-Knowing  Unquote

(Please refer Resolution No. 63)

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