Check out the Al-Madinah Int'l University PhD in Islamic Banking and Finance. It appears to be an program that could be very attractive to aspiring Shari`ah advisors, particularly those who are have strong English-speaking backgrounds and have completed Masters' degrees (or have Masters' equivalent training) in Islamic studies at traditional seminaries (e.g. the Nizamiyya madaris in the South Asian subcontinent or diapsora) or in an Arabo-Islamic college or university. Thanks to  Sh Moustafa Kassem, our newest associate, for bringing this to our attention.

Check out the Durham Islamic Finance Program and its programs.

Gadhafi’s exit to spur Libya’s Shariah banking (Bloomberg).

The Islamic Globe's current issue includes an article in which an interesting scheme is described: mobile phone airtime, provided by Malaysian a virtual network provider, is used as the underlying commodity in a tawarruq-based scheme that is offered via a personal financing software system that apparently acts as a broker.

European nations ban short selling (NYT).

An answer written last year (May 10, 2010) that is posted here for possible benefit.

Al-hamdu li-llah wa s-salatu wa s-salamu `ala sayyidina Muhammad wa-`ala alihi wa-sahbihi ajma`in.

1. Introduction

Trading across currencies ( al-mutajarah fi'l-umlat) is permissible (tajuz) provided that certain ahkam (norms) and qawa`id (principles) are observed. Observing these ahkam (norms) and qawa`id (principles) is of great importance since failure to do so will result in the commission of riba.

Allah says: <<Ya ayyaha l-ladhina amanu dharu ma baqiya mina r-riba in kuntum mu'minin>>

The most noteworthy of the ahkam and qawa`id that most be observed when trading in currencies are ahkam and qawa`id in the area of currency exchange (sarf), as they apply to contemporary currency exchange. Among these ahkam and qawa`id are the following:

1. Between sovereign currencies (e.g. US-EUR), exchange must be spot (immediate). Accordingly, currency futures, currency forwards and other currency derivative contracts, in which delivery of one or both of the currencies may occur in the future are impermissible.

2. Between sovereign currencies (e.g. US-EUR), exchange may be in disimilar amounts. Example: One may exchange 10 AUD for 8.64 USD.

2.1 However, exchange between sovereign currencies (e.g. US-EUR) must be at the market exchange rate that prevails at time of execution of the exchange.

The basis ( mustanad) of the aforementioned ahkam and qawa`id is qiyas (analogy) on the basic furu` in bab al-sarf and istiqsa' (inductive analysis) of the furu` of bab al-sarf and bab al-riba respectively. Contemporary fuqaha' known for their expertise in the ahkam of modern financial applications (tatbiqat masrafiyyah mu`asirah) hold that sovereign currencies are analogous to (tuqasu `ala) gold and silver (al-dhahab wa l-fiddah), including (and this is what concerns us here) when it comes to exchange across classes (asnaf).  The adillah for the aforementioned ahkam are therefore those that the imams of fiqh have mentioned in the mutun in bab al-sarf and bab al-riba.

Now to your question.

1) Trading in currencies with the expectation that one will profit by taking advantage of the difference between the purchase price and sales price (i.e. arbitrage) is permissible provided that the relevant  ahkam and dawabit are observed (see nos 1, 2 and 2.1 above).

2) Leveraging, in currency (and other) markets, typically consists of borrowing money on interest. This is impermissible. In theory, if one could borrow without riba (interest or other fees, penalties, etc in excess of the principal) and then trade (spot) with it, this would be permissible.

3) The multiplier effect of using leveraged funds to speculate in currency exposes one to siginificant loses and debt. However, this potential exposure to loss and debt, in and of itself, does not render the practice of leveraged speculation impermissible, but rather makruh according to the sound position (`ala l sahih).

Advice: Since a) the prevailing currency trading platforms and markets are marred with riba, gharar and various other prohibited transactions and invalid stipulations, I advise that no one engage in this activity, except a person who is trained in the fiqh of this domain and has the wherewithal or financial backing that will allow him to reasonably expect to be able to cover his possible losses.

It is transmitted that Umar b. al-Khattab (radiya llahu `anhu) said <Let none approach our markets (to trade therein) except for those with the appropriate fiqh, otherwise they will fall into usury (riba), willingly or unwillingly.>

Wa-llahu a`lam.

The neediest slave of Allah,
Taha Abdul-Basser

There is an article in the current issue of the Islamic Globe on one of our clients, NoRibaTrade.com

It is a noteworthy and encouraging development in the Egyptain financial sector (and in perhaps the larger Egyptain society) that the management of the Egyptian Stock Market 1) has openly announced that it is awaiting the decision of Sh Ali Jumua, the Mufti of Egyptian, on the permissibility of its proposed short selling platform before launching it; 2) has submittted its revised Short selling proposal to the Mufti's office for review and 3) has stated explicitly in the press that it does not want the platform to resemble "games of chance," even using the relevant term from islamic ethics maqamarah.

See article (Arabic).