Rules and religious constraints

Muslim investors must follow a number of rules in their daily lives. These are also applicable in the financial sector, whether the retail banking, private banking or investment banking.

The Shariah is the Islamic code of conduct to be followed by Muslims and which is established using the methods explained below.

"Fiqh" which means law, represents the extraction of rules from the sources of Shariah which are:

• The Koran (Al-Quran);
• The Sunnah referring to the teachings and practices of the Prophet Muhammad and interpretations of the Koran.
• Al-Jima, which represents the consensus of the sages.

The restrictions imposed by these rules and applicable to financial products are of several kinds(1) :

• The payment and receipt of interest are prohibited (Riba). Usury is forbidden.
• The products are inherently speculative or whose flows are uncertain and which introduce uncertainty (Gharar) Are prohibited. This basic rule thus excludes the use of derivatives by the Muslims and especially futures, options and transaction type Forward.
• Gambling and Paris (Maisie) Are strictly forbidden (Qimar).
• Investments in companies considered unethical (tobacco, casinos, sex industry) are prohibited (Haram).

Products labeled "Islamic" must comply with these rules.

In addition, to ensure that the financial products they issue conform to the Koran, the banks must use a Shariah board or committee Shariah.

It is composed of specialists on Islamic and are responsible for approving their products by putting a compliance certificate.

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