Can derivatives be shariah compliant?

Salam,

My understanding is that derivatives by their nature are not shariah compliant

point 3 of page 55 of the https://www.franklintempleton.co.uk/download/en-gb/common/h6fjq4nh/Franklin-Templeton-Shariah-Funds-Prospectus.pdf says “use Shariah-compliant financial derivative instruments for hedging purposes only”.

Not seeking screening or advice on investment but a general question if there is any such thing as “Shariah-compliant derivatives”

Regards
Zeeshan

Wasalam

May Allah bless you.

Yes there are some Islamic derivative instruments available in the market.

There is a short interesting book called Derivatives in Islamic Finance by Sherif Ayoub. Inside you will find a section about current derivatives used in the Islamic finance industry.

And Allah knows best!

Are from AUS brother

Salam

No brother I don’t live in Australia.