CONTRA TRADING IN BURSA MALAYSIA SECURITIES BERHAD: A SHARIAH AND LEGAL APPRAISAL (ISSF 2016) (Paper)

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Introduction

 

Contra trading is an important aspect in stock trading. It allows a buyer who bought the shares to sell them before paying for the price of the shares to the seller. However contra trading is only given to those buyers who meet the prerequisites set by the authorities thus making this trading a supervised and regulated trading on the Bursa Malaysia Securities Berhad (‘the Exchange’). Having said that and despite the claim that contra trading facilitates the efficiency and liquidity of the market, the manner in which it is being carried out attracts Shariah scrutiny.

This paper examines Shariah issues relevant to the contra trading. Four issues have been identified in contract trading. They are:

 

i. Deferment of both counter-values (تأجيل البدلين )

ii. Selling something before taking it into possession (بيع الشيء قبل فبضه )

iii. Profiting without bearing liability (ربح ما لم يضمن )

iv. Gambling (الميسر/ المقامرة )


 

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