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Commodity Futures: A Maqasid Al-Shariah Based Analysis

Author

Listed:
  • Nadhirah Nordin
  • Mahadi Mohammad
  • Azlin Alisa Ahmad
  • Mohamad Sabri Haron
  • Normadiah Daud

Abstract

This paper aims to analyse Malaysian Crude Palm Oil futures (FCPO) in light of the maqasid alShariah. The Shariah Advisory Council of the Malaysian Securities Commission (SAC) resolves that FCPO is permissible as it is in accordance with Shariah principles. The maqasid al-Shariah is the objectives and wisdom (hikmah) as prescribed by the Shariah in all its rulings to preserve the benefits of, and prevent harm to, human wellbeing. It can be categorized into three broad categories, namely daruriyyah (necessity), hajiyyah (requirement) and tahsiniyyah (embellishments). The approaches used in this study are document analysis and interviews. This study found that FCPO does not fulfil the categories of daruriyyah (necessity) and hajiyyah in the maqasid al-Shariah. Thus, it is suggested that FCPO should promote maqasid al-Shariah in its holistic direction. The legality of a financial contract is judged from the contract (aqd) aspect and equally important is on its economic and social impacts to the society.

Suggested Citation

  • Nadhirah Nordin & Mahadi Mohammad & Azlin Alisa Ahmad & Mohamad Sabri Haron & Normadiah Daud, 2017. "Commodity Futures: A Maqasid Al-Shariah Based Analysis," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(8), pages 602-614, August.
    • Handle: RePEc:hur:ijarbs:v:7:y:2017:i:8:p:602-614
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    References listed on IDEAS

    as
    1. M.Umer Chapra, 1988. "Towards An Islamic Financial System," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 1(2), pages 1-30, July.
    2. Bacha, Obiyathulla I., 1999. "Derivative Instruments and Islamic Finance: Some Thoughts for a Reconsideration," MPRA Paper 12752, University Library of Munich, Germany.
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    Cited by:

    1. Khairil Faizal Khairi & Mohamad Subini Abdul Samat & Nur Hidayah Laili & Hisham Sabri & Mohd Yazis Ali Basah & Asmaddy Haris & Azrul Azlan Iskandar Mirza, 2020. "Takaful Protection for Mental Health Illness From the Perspective of Maqasid Shariah," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(3), pages 168-175, June.
    2. Romi Adetio Setiawan, 2022. "Issues in Islamic Derivatives and Proposals for Reforms in the OTC Market in Indonesia," JRFM, MDPI, vol. 15(5), pages 1-16, May.

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