It therefore resolved the following:

First – Concerning the form of muḍārabah certificates that is acceptable in the Sharīʿah:

1 – A muḍārabah certificate is an investment instrument that segments the muḍārabah capital by issuing ownership certificates of equal nominal value. These certificates are registered in the names of their holders, who thereby own undivided shares in the muḍārabah capital and in whatever that capital may subsequently be converted into, each in proportion to his respective share. It is preferable to designate this instrument “ṣukūk al-muqāraḍa” (muḍārabah certificates).

2 – For muḍārabah certificates to be deemed permissible under the Sharīʿah, they must embody the following elements:

Element One:
The certificate must represent an undivided ownership share in the project for which the certificates were issued—whether for its establishment or for its financing—and that ownership must remain in force for the entire life of the project, from start to finish. All rights and dispositions the Sharīʿah assigns to an owner with respect to his property—such as sale, gift, pledge, inheritance, and so forth—accordingly apply, bearing in mind that the certificates constitute the muḍārabah capital.

Element Two:
The contract underlying muḍārabah certificates rests on the following: the prospectus sets out the contractual terms; the “offer” is expressed by subscribing to the certificates; and the “acceptance” is expressed by the issuer’s approval. The prospectus must include all the information the Sharīʿah requires for a muḍārabah contract, such as a clear statement of the capital amount and the method of profit distribution,