WORLD - PUBLICATIONS - Operative Principles of Islamic Derivatives - Towards a Coherent Theory

Operative Principles of Islamic Derivatives - Towards a Coherent Theory

IMF Working Paper Series

Andreas Jobst and Juan Sole

March 1, 2012

Summary: Derivatives are few and far between in countries where the compatibility of financial transactions with Islamic law requires the development of shari’ah-compliant structures. Islamic finance is governed by the shari’ah, which bans speculation and gambling, and stipulates that income must be derived as profits from the shared generation of goods and services between counterparties rather than interest or a guaranteed return. The paper explains the fundamental legal principles underpinning Islamic finance with a view towards developing a cohesive theory of derivatives subject to shari’ahprinciples. After critically reviewing accepted contracts and the scholastic debate surrounding existing financial innovation in this area, the paper offers an axiomatic perspective on a principle-based permissibility of derivatives under Islamic law. (source)

INDONESIA - GOLD - Indonesia sharia banks to clamp down on gold speculators

bullionstreet.com - JAKARTA(BullionStreet) : Indonesia, where the world's largest muslim population lives said it will soon introduce a regulation preventing Islamic banks from funding gold specualtors.

According to country's central bank, Bank of Indonesia's sharia banking director Mulya Siregar, a regulation to limit the pawning of gold at sharia banks will be required as most of bank customers tend to use the service for speculation. (source)

INDONESIA - GOLD - Ma'ruf Amin: Transactions Gold Can, Origin Do Speculation

REPUBLIKA.CO.ID, JAKARTA - National Sharia Council of Indonesian Ulama Council (MUI DSN) back gold is affirming that the transaction is a business that is allowed in Islamic banking. DSN MUI Chairman Ma'ruf Amin said it is set in a fatwa issued by the agency. "From the DSN, we had been given permission.

We'll give certification Golden Trader Indonesia Sharia (GDIS). Selling gold through Islamic banks should, as well as give a loan (mortgage), "he asserted when found on Saturday (17 / 9). (source)