"Islamic Finance Researches" (IFR)
Jurisprudential Analysis of Uncapped Capital Protection Certificate as a New Instrument in Iran's Capital Market
Document Type : Science - Research (Islamic Capital Market)
Authors
1 Department of Financial Management-Faculty of Economic and Management, Islamic Azad University Science and Research Branch, Tehran, Iran
2 Department of Mathematics, Faculty of Statistics, Mathematics and Computer Science, Allameh Tabataba’i University, Tehran, Iran.
3 Department of Financial Management, Faculty of Management and Economic, Islamic Azad University Science and Research Branch, Tehran, Iran.
4 Department of Financial Management, Faculty of Islamic Studies and Management, Imam Sadiq University, Tehran, Iran.
Abstract
Stock exchanges are always trying to design new financial instruments according to the needs of investors and market participants. Among the new financial instruments that can be traded on many stock exchanges, such as Switzerland and Germany, is the uncapped capital protection certificate, which is issued by a third-party entity (e.g., credible companies and financial institutions) and is usually used for financing purposes. This certificate is issued like derivative instruments based on an underlying asset such as stocks and stock indices.
Despite the numerous applications of uncapped capital protection certificates, their compliance with Islamic sharia requirements has not yet been examined. Therefore, the purpose of this research is to examine the possibility of launching uncapped capital protection certificates trading in the Iranian capital market from a jurisprudential point of view and for this purpose, a multi-stage ijtihad method has been used. In this regard, the researcher first examined the possibility of trading these certificates within the framework of three contracts, including mudaraba, wekala, and Musharaka and then, through the holding of a meeting group, the opinions of economic jurisprudence experts have been collected in this field. The results of the study indicate that uncapped capital protection certificate trading is feasible from a jurisprudential perspective in all three contract frameworks, including mudaraba, wekala, and Musharaka.
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