Fatwa
Scholarly fatwas · Indices

Islamic scholars and bodies ruling on indices.

Who ruled·What they said·Where to read it

You cannot own an index, only the companies in it. The bodies below disagree on trading the index itself.

Last reviewed 26 September 2026.

2
Rulings collected
1
Permitting, with conditions
1
Prohibiting

Rulings and positions

International Islamic Fiqh Academy (OIC)Prohibit trading the index

For the Academy, an index is only a number: a statistical figure that shows how a market has moved. There is nothing behind it for you to own.

So trading the index itself fails. The 1992 resolution calls it "pure gambling," and the sale of something that does not exist.

SourcesIIFA Resolution 63

Shariah Advisory Council, Securities Commission MalaysiaPermit, Shariah index only

Malaysia's SAC looked at the same question in 1998 and reached a different answer. It found that stock index futures do not contradict Shariah principles, as long as every company in the index is Shariah-compliant.

In practice that means a Shariah index. A contract on a conventional index, full of banks and insurers, does not meet its condition.

SourcesSC Malaysia SAC resolutions (PDF)

Foundations and principles

The disagreement is about the index as a thing to be sold. The Fiqh Academy sees a trade in the number itself as a bet on a figure. Malaysia's SAC looks through to the companies and permits the contract when every one of them is compliant.

The prohibition of gambling rests on Al-Ma'idah 5:90-91, and the prohibition of transactions with excessive uncertainty (gharar) on Sahih Muslim 1513.

ReadAl-Ma'idah 5:90-91Sahih Muslim 1513

What passes

  • Owning the shares behind an index, through a fund or Islamic ETF that holds only compliant companies. That is share ownership, judged by the rulings on stocks.
  • Index CFDs and index futures fail on the Fiqh Academy's ruling. Malaysia's SAC permits index futures only where every company in the index is Shariah-compliant.

Further reading

References

  1. International Islamic Fiqh Academy (9 to 14 May 1992). Resolution No. 63 (1/7) on Financial Markets (Shares, Options, Commodities, and Credit Cards), Jeddah. Source
  2. Securities Commission Malaysia (2006). Resolutions of the Securities Commission Shariah Advisory Council, Second Edition. Source

ShariaQuant summarises what each body ruled, quotes the wording that matters, and links to every source so you can read the full ruling yourself. This is a record of their rulings, not a fatwa of our own.