Open AccessREGULATED SHORT SELLING IN BURSA MALAYSIA: EVALUATING THE USURY ISSUE
Author(s) -
Azlin Alisa Ahmad,
Norhoneydayatie Abdul Manap,
Nor Qamal Danial Mohd Safuan
Publication year - 2021
Publication title -
international journal of advanced research
Language(s) - English
Resource type - Journals
ISSN - 2320-5407
DOI - 10.21474/ijar01/12380
Subject(s) - usury , business , commission , speculation , market liquidity , profit (economics) , database transaction , value (mathematics) , commerce , finance , accounting , economics , microeconomics , islam , philosophy , theology , computer science , programming language , machine learning
Regulated short selling transactions is an alternative that was introduced by the Syariah Advisory Council (SAC), which is attached to the Securities Commission Malaysia, to implement short selling in Malaysia. Short selling is not permitted because it involves various Shariah-related issues, including usury, uncertainty (ghÄÂrar), gambling, speculation etc. Since short selling has advantageous in terms of liquidity and opportunities for investors to reap profit when the value of securities fall, hence, regulated short selling activities should be restructured so that it can be implemented without transgressing the boundaries of syarak. This qualitative study used the content analysis approach to examine and determine whether the element of usury still exists in regulated short selling. Findings show that regulated short selling transactions adopted by Bursa Malaysia is combined with the Securities Borrowing and Lending (SBL) mechanism. Therefore, implementing regulated short selling in Bursa Malaysia can solve the usury issue when short selling transactions are combined with SBL, which uses the ijarah bi istihan principle.