"Islamic Finance Researches" (IFR)

Evaluation and Analysis of Copy Trading and Mirror Trading Contract from a Jurisprudential and Legal Point of view

Document Type : Science - Research (Islamic Capital Market)

Authors

1 M.A. in Financial Management, Sciences and Research Branch, Islamic Azad University, Tehran, Iran; & Iranian Association of Islamic Finance

2 Ph.D. in Financial Engineering, Sciences and Research Branch, Islamic Azad University, Tehran, Iran; & Iranian Association of Islamic Finance

Abstract

Copy trading and mirror trading are new trading methods that have been widely used in the financial markets. Their characteristics make them be used in deepening the Islamic capital market and be exploited by market policymakers as a necessity in quantitative and qualitative development.
The purpose of this article is to analyze the relationship between the elements of copy trading and mirror trading from a jurisprudential and legal point of view and its practical evaluation; it is looking for an answer to the question whether it is possible to use the existing capacities in this trading method in the development of the Islamic capital market and the expansion of Islamic fintech and whether this form of trading is compatible with the principles and standards of Islamic jurisprudence. In order to answer these questions, qualitative research method and interview tools were used in the form of holding focus groups. The results of the research confirm that the use of copy trading and mirror trading in Iran's capital market does not conflict with Islamic Shariah from a jurisprudential, legal and executive point of view, and it can be used in the Islamic capital market. Also, the aforementioned finding has been approved by the shariah committee of the Securities and Exchange Organization in Iran.

Keywords

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Volume 11, Issue 1 - Serial Number 21
February 2021
Pages 39-74
  • Receive Date: 16 October 2021
  • Revise Date: 19 January 2022
  • Accept Date: 31 January 2022