Trading of securities (valuable documents) is one of the most popular trading transactions in the last century. This means that investors own valuable documents which represent the ownership by dividing the ownership and converting it to shares, instead of owning the goods itself directly. Securities are two different types which are securities represent receivable and securities represent ownership. Securities that represents a receivable are; government bonds, treasury bonds, company bonds, other borrowing securities issued by government institutions and other bonds issued in different names which assigns the payable-to-bearer receivables. International Islamic Jurisprudence Academy and, Accounting and Auditing Organization for Islamic Financial Institutions are unanimously prohibit the issuance of this kind of securities. Securities that represents ownerhip are; Equity shares, investment funds and sukuk. Equity shares, essentially aims to own a cash or recorded share of a company. This transaction consists of representing a cash or recorded asset by a written document and represents a common share in the capital of a company. Equity share is a financial document according to commercial law and represents ownership right in a company. Therefore, it is classified under the ownership documents. Commercial Law – as a company is a legal entity- separates equity ownership and company asset ownership. Equity share is assigned independent from the assets of a company. Thus, the equity shares issued by the company are owned by the company itself through assignment and hereby investor partners lose their registered rights. Investor partners have only a right in the profit made by the company throughout the time period they stayed in the corporation. Likewise, investors have rights in distribution of sale of the assets of the company in case of liquidation of the company. Because, investors own a part of shares of the company and a company, having legal entity, is independent from ownership of its own assets. There are two different opinions in the Islamic law. The first opinion is based on the situation if the company is a trust or mudaraba company. Share of partner comprises all of the assets of the company in both types. Shareholder is not prohibited from owning some assets of the company even though the company is a separate legal entity. Likewise, an equity share is a document which only proves the right of the shareholder in the company. It has no value by itself. However, it should have the same treatment with the company assets as it represents a right in company assets. According to the second opinion; Shareholders own the assets of the company indirectly but not directly and they have no capacity to act on the assets. Even if the value of the assets of the company becomes more valuable than the value of the shares of the company, equity share owners have no right to demand the access value. Likewise, they don’t bear any personal responsibility if the company borrows or makes loss because shareholders do not directly own the assets of the company. Sukuk represents common ownership on specific goods, asset or service, a specific project or assets employed in a specific investment activity and they are certificates issued equals to each other in terms of their values. Basically, there are two types of sukuks; Sukuk representing ownerhip and sukuk representing a receivable. While ijara sukuk, sukuk which enables to own a benefit, sukuk that enables to have a service and partnership based sukuk are represents ownerhip; murabaha sukuk, istisna sukuk and selem sukuk are the sukuk types which represent a receivable. The main characteristics are; Sukuk represents a common partnership on assets which are investment purpose underlying assets, goods, service, benefit or a mix of these by receivable, cash and intangible rights. Sukuk doesn’t represent a debt of an issuer. Sukuk is issued based on an agreement which is in compliance with Islamic rules essentials. Sukuk manager has no guarantee. Sukuk makes one a partner on profit on a defined rate and loss is limited by the share invested. Sukuk owners cannot pre-define a proportional or an amount of profit on nominal value of sukuk. All of the risks are taken. Circulation capacity of the sukuk in the Secondary market depends on the circulation capacity of the underlying asset itself in the secondary market. Sukuk owners undertake expenses which arise from the underlying asset sukuk represents - including maintenance, insurence, impairment or other expenses stem from investment itself. Investment fund is an asset which is setup by the money collected from the public in compliance with the law, in purpose of running a portfolio consists of certain assets in the name of certificate owners based on principle of risk distribution and fiduciary ownership.
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