Resolutions-of-Islamic-Fiqh-Council-1

Third:Cash deals of the company shares, when these shares are inthe seller's possession are permissible in the Islamic Shari'ah solong as the dealings of these companies are not prohibited suchas the usurious banks and companies of alcoholic drinks. In suchcases it is prohibited to sell or buy their shares.Fourth:The cash and credit deals of the bonds with interest of anykind are not permissible in the Islamic Shari'ah, because these arethe transactions which involve usury.Fifth:The credit deals with all their kinds that take place aboutshares and goods which are not in the seller's possession in theway that is common in the stock market are not permissible inthe Islamic Shari'ah, because it is a sale in which a person sellswhat he does not possess in a hope that he would buy it later andhand it over on the fixed date. Such deal is prohibited in theIslamic Shari'ah as Prophet Muahmmad (peace be upon him) hasbeen reported as saying: "Don't sell what you do not possess."Similarly, Zaid Ibn Thabit (may Allah be pleased with him) hasreported that the Prophet (peace be upon him) prohibited the saleof goods where they are bought until the traders possess and takethem to their saddlebags. (Ahmad, Abu Dawood).Sixth:The credit deals in the stock market are not the kind of goodssale which is lawful in the Islamic Shari'ah, since there isdifference between the two on account of two reasons:a) In the stock market, the price is not paid in the credit dealsduring the deal session. The payment of price is delayed to thedate of settlement, while the price in the sale of Salam must bepaid in the deal session.171