Comparing The Sharia And Legal Framework For Single-Stock Futures Contracts Between The Saudi Approach And The Malaysian Experience

Abstract

This study aims to conduct an analytical comparison between the legal (regulatory) and Shariah framework for Single Stock Futures (SSFs) in both the Kingdom of Saudi Arabia and Malaysia. The research problem stems from the jurisprudential debate on the legitimacy of these financial derivatives and the disparity in the legal regulations governing them in Islamic financial markets. This research employs a descriptive, analytical, and comparative approach to examining the mechanisms of contracts, analyzing the regulatory framework of each market, and discussing the points of agreement and disagreement between the two experiences. The research concludes that both the Saudi and Malaysian experiences have developed legal frameworks that allow for the introduction of futures contracts into their financial markets, while adhering to Sharia principles and striving to balance market demands with Sharia compliance. The Saudi experience focused on establishing a regulatory framework for risk management and financial market stability. The Malaysian experience demonstrated the capacity to develop Islamic financial products that combine financial innovation with adherence to Sharia principles. The study recommends: Leveraging the strengths of the Malaysian experience: the integration of Sharia supervision with legal regulation, while respecting the specific legal and regulatory context of the Saudi financial market and avoiding the literal adoption of foreign models. Enhancing integration, cooperation, and coordination between the Capital Market Authority, Sharia boards, and financial institutions to develop futures contracts and link them to tangible, deliverable assets to bolster the economy.