EghtesadOnline: Iran’s capital market is ready to establish a committee with Islamic countries to design joint financial Islamic instruments, head of the Securities Exchange Organization told the 11th International Forum on Islamic Capital in Tehran on Sunday.
Shapour Mohammadi spoke of a wide range of financial instruments available in Iran’s capital market which can be shared with other countries.
"Close to $18 billion worth of financial securities was issued in Iran in 2018, which are mainly Islamic financial instruments,” IRNA quoted him as saying.
"A variety of Islamic financial instruments such as mortgage-backed and Istisna bonds, Musharakah, Mudarabah, Murabahah, Ijarah, and Takaful are available in our capital market," the official said. He said other instruments can also be used in Iran after being adaptation in accordance with the Sharia law and approved by the SEO Jurisprudence Council, according to Financial Tribune.
The council plays a key role in development and implementation of Islamic financial instruments.
A main responsibility of the Jurisprudence Council is to monitor the financial instruments and contracts used in the stock market. It also is mandated to match the instruments with the Sharia principles.
Mohammadi said the Jurisprudence Council has modified the existing financial instruments in the world’s stock markets and made it compatible with Islamic rules.
As one of the widely used instruments, he pointed to short sell contracts that will be launched in the current fiscal (March 2019-20).
In finance, a short selling is the sale of an asset (securities or other financial instruments) that the seller has borrowed to profit from a subsequent decline in the price of the asset. After borrowing the asset, the short seller sells it to a buyer at the market price of the time.
He also said that aside from valid financial instruments, the number of mutual funds in Iran has reached 211. Stocks of more than 600 companies are traded at Tehran Stock Exchange and Iran Fara Bourse.
The SEO held the International Forum on Islamic Capital Market from two days. It has organized the event for 11 successive years with support from the Islamic Development Bank (IDB) and the Islamic Research and Training Institute (IRTI).