SS 16 – Commercial Papers

The purpose of this standard is to elaborate the rules pertaining to commercial paper, the types permitted and those not permitted, the rules for dealing in commercial paper, its collection, discounting, possession and the acceptance of the obligation to pay, as well as the elaboration of the Shari’ah regulations for Islamic financial Institutions (Institution/Institutions) for dealing in commercial paper.

The word (Institution/Institutions) is used here to refer, in short, to Islamic financial institutions including Islamic Banks.

Scope of the Standard

This standard covers commercial papers to which the Geneva Uniform Convention on the Law of Commercial Papers, confined itself. These are bill of exchange, promissory note and cheque. This standard covers dealings in such commercial papers insofar as they conform to the rules and principles of the Shari’ah. The standard does not cover anything that may possess the attributes of commercial paper other than the three types named above. 2. Definition and Shari’ah Characterisation of Commercial Papers