SS 20 – Commodities in Organised Markets

This Standard aims to elaborate the foundations on which international commodity sales, between parties from different countries, are based whether the contracts have been concluded for spot or deferred commodities or through derivatives (futures, options, indexes and swaps). The Standard also explains what is permissible out of these according to the Shari’ah and what is not, along with an explanation of the Shari’ah substitutes for them within the Islamic financial institutions (Institution/Institutions).

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 international sales contracts whose subject-matter are commodities and to derivatives of various kinds: Swaps, Indexes, Futures and Options. The Standard does not cover financial and commercial paper or currencies, because these have their own specific standards, just as it does not cover sales that are concluded outside the organized markets. 2. Definition of International Sales and Their Kinds