FAQs

Question

Is Futures, Options and Derivative trading Shariah Compliant

Answer

No. It is not permissible to enter into any transaction involving options, futures or swaps, or a derivative whether the underlying asset is tangible and real, for instance a commodity or share or intangible, such as an index or occurrence of a projected event. Having said that, the above statement applies in the context of the manner in which the trading of these instruments is currently organized. Shariah scholars have suggested alternative ways in which some of the uses, such as hedging, for which the above instruments are used could be achieved by structuring them differently. The methods suggested will need to be assessed in the light of applicable regulations and the views of our Shariah Board.