Islamic Commercial Law: An Analysis of Futures and Options

Islamic Commercial Law: An Analysis of Futures and Options

Islamic Commercial Law: An Analysis of Futures and Options focuses on options and futures as trading tools and explores their validity from an Islamic point of view. Futures and options are a completely new phenomenon which has no parallel in Islamic commercial law. After reviewing the existing rules of Islamic law of contract and verifying their relevance or otherwise to future’s trading, the author, Professor M H Kamali, advances a new perspective on the issue of futures and options based on an interpretation of the Qur’an and the Sunnah and referring to the principle of maslaha (consideration of public interest) as enshrined in the Shari’ah. Islamic Commercial Law consists of three parts. Part One is devoted to the description of futures trading and the understanding of operational procedures of futures and futures markets; Part Two investigates the issue of permissibility of futures trading in Islamic law and the underlying questions of risk-taking and speculation, which are of central concern to the topic. Part Three is devoted to an analysis of options. This work will be of use to anyone working on Islamic law, comparative law or working in Islamic banking.

About Author:

Mohammad Hashim Kamali (born February 7, 1944, Nangarhar Province, Afghanistan) is an Afghan Islamic scholar and former professor of law at the International Islamic University of Malaysia. He taught Islamic law and jurisprudence between 1985 and 2004. Born in Afghanistan in 1944, he graduated from the University of Kabul and the University of London.

Kamali is the author of Islamic Commercial Law (2000), a study of the application of Shariah principles to some crucial financial instruments, options and futures contracts. He takes a much more permissive view of these instruments than do most Islamists.

In his book, Islamic Commercial Law (2000), Kamali wrote, for example, that many have “passed prohibitive judgments on futures and options” who have “not only failed to produce decisive evidence in support of their positions but have done so on the assumption that futures trading has no social utility and has no bearing on the welfare… of the people.”

Among the scholars who pass the “prohibitive judgments” with which Kamali disagrees are Muhammad Akram Khan and Umar Chapra.

Mohammad Hashim Kamali served as Professor of Islamic law and jurisprudence at the International Islamic University Malaysia, and also as Dean of the International Institute of Islamic Thought & Civilisation (ISTAC) from 1985-2007. He is currently the CEO of the International Institute of Advanced Islamic Studies (IAIS) Malaysia under the newly appointed Chairman of the Institute, Former Prime Minister of Malaysia, Tun Abdullah Haji Ahmad Badawi. He studied law at Kabul University and then served as Assistant Professor, and subsequently as Public Prosecutor with the Ministry of Justice, Afghanistan, 1965-1968. He completed his LL.M. in comparative law and a PhD in Islamic and Middle Eastern law at the University of London, 1969–1976.