The Stock Market and Madhhabs

Question: Is investing in the stock market permissible in the Shafi’i school?

Answer:

Wa alaykum assalam wa rahmatullahi wa barakatuh,

Dear questioner,

Thank you for your important question.

In principle, investing in the stock market is permissible in the Shafi’i school. One of the most significant scholars who worked on modern Islamic finance was the late Dr. Wahba Zuhayli, and he was Shafi’i.

Please see:
https://seekers.flywheelstaging.com/answers/hanafi-fiqh/investing-in-stocks-and-working-as-a-stock-broker/

In general, though, there have been many significant developments in Islamic finance and a lot of research has been put into creating a modern standard that is somewhat meta-madhhab. By this, I mean that the standards are taken from different madhhabs, and also demonstrate a level of refinement that is somewhat beyond what you would normally find in any traditional reference work in any individual madhhab.

For this reason, it is usually better to either rely on the specific fatwa of one’s own Muslim country and if not, then an internationally accepted body of Islamic finance standards such as the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards.

I pray this helps.

[Ustadh] Farid

Checked and Approved by Shaykh Faraz Rabbani

Ustadh Farid Dingle has completed extensive years of study in the sciences of the Arabic language and the various Islamic Sciences. During his studies, he also earned a CIFE Certificate in Islamic Finance. Over the years he has developed a masterful ability to craft lessons that help non-Arabic speakers gain a deep understanding of the language. He currently teaches courses in the Arabic Language