Financial Paper (Shares and Bonds) - Appendix C (Definitions)

Transcription

1. Shari ’ah Standard No. (21): Financial Paper (Shares and Bonds) Appendix (C) Definitions Share It is the share of a shareholder in the assets of the corporation and is represented by a certificate that can be negotiated. The term share is also applied to the certificate that represents such share. Preference Shares These are shares whose bearer is accorded priority over the holder of the ordinary share in the distribution of dividends and in claiming his share in the assets of the corporation at the time of liquidation. Tamattu’ Shares These are shares whose holder is granted compensation for his shares that are offered for redemption during the existence of the corporation, and in exchange for this he is granted Tamattu’ shares that grant him the rights that belong to the holder of shares based upon capital, except in dividends and the distribution of assets a the time of its winding up, insofar as the owner of the Tamattu’ shares is given a share in the profits less than that given to the shares based upon capital, just as the owner of the Tamattu’ shares does not get a share in the assets of the corporation at the time of winding up until the owners of shares based on capital are granted the value of their shares. Futures Contract It is a contract for a specified thing, or one described as deferred liability, for a deferred prince. Option Contract It is a contract for compensation for an abstract right granting the owner the right to sell a specified thing, or to buy it for a specified price, during 580
2. Shari ’ah Standard No. (21): Financial Paper (Shares and Bonds) a determined period, or at a fixed date, either directly or through an organisation that guarantees the rights of the two parties. Swap Contract It is an agreement between two parties to exchange at a subsequent date the average return on a specified share, or a group of share for the average return on a share or for another financial asset. Bond It is a financial paper issued by trading establishments and governments in order to raise long-term loans (wealth) in lieu of interest that is paid to the bearer of the bond after periods. They are sometimes issued at a discount with respect to their face value. 581