The economic system in Islam enables us to extend in financial transactions, and open the door for many developing ideas unless it is against the Islamic legislation. One of the tools of the Islamic economy which appeared recently, is “Instruments”, which is in the middle between bonds and financial shares, it avoids the drawbacks of each and is less risky.
Instruments are certificates or securities equal in value, which means that the financial value of each instrument equals the other instruments. Through offering those instruments for trading, the owners of those instruments became partners in the project’s assists, in other words you can present instruments with the aim of getting finance, so owners of instruments became your partners. The instrument’s owner could sell it anytime. What real makes instruments unique is that its owners bear loss and profit, while bonds are debt certificates, the owners lend a project and get a percentage of the interests in the case of loss or profit. Instruments are for a specific period of time, sooner or later the capital and the profit is back to the owners and the project’s assist ownership is back to the original ownership. The instrument’s owners get the capital or less a little bit according to the project success, but the owners of the financial shares get their shares from the company’s assists, in addition they pay off the debt.
Instruments depend on fixed assists of real projects or projects under construction, those projects are built according to an accurate feasibility study, to avoid loss as much as they can, so the revenues can be predictable, unlike the shares which is controlled by the force of supply and demand law and can be affected by the economic situation, so it’s more risky.
Instruments are less risky than shares; it’s about converting real assists to securities for trading, and not based on debts. So instrument is a tool that helps achieving Islamic economy through buying and selling, achieving the concept of participating in loss and profit.
Instrument is one of the tools that help applying the real economy according to the Islamic shari’a in addition to that it is less risky and more stable.