The PRIMARY OIC ruling behind halal SUKUK (Islamic 'bonds') — the International Islamic Fiqh Academy (OIC), Resolution No.
The PRIMARY OIC ruling behind halal SUKUK (Islamic 'bonds') — the International Islamic Fiqh Academy (OIC), Resolution No. 137 (3/15), 'Ṣukūk al-Ijārah (Leasing Bonds)', adopted at the Academy's 15th session in Muscat, Sultanate of Oman, on 14–19 Muḥarram 1425H (6–11 March 2004). Where Resolutions 40-41, 110 and 136 anchor the three HOME-FINANCE contracts and Resolution 123 anchors the pooled investment account, this anchors the tradable-security layer — how an income-producing asset can be righteously turned into something a Muslim can buy and sell on a market WITHOUT it becoming an interest-bearing bond. It defines what a leasing ṣukūk actually is: 'documents of equal values representing common shares in the ownership of income-producing assets or usufructs' — real ownership of a real leased thing, not a loan. From that one fact flow the concrete reader-tests below: the ṣak must represent tangible leased assets, its market price floats freely, its return is the actual rent, and the issuer may NOT guarantee the principal or the return.
What this source says
By 2004 the OIC Fiqh Academy had already ruled on how a Muslim may righteously BUY a home (murabaha, Resolution No. 40-41; lease-to-own, Resolution No. 110; diminishing partnership, Resolution No. 136) and where a Muslim may righteously PARK savings (the Muḍārabah investment account, Resolution No. 123). This resolution answers the next question a serious halal investor asks: can a real, income-producing asset — a leased building, an aircraft, a ship — be turned into a security you can buy on a market and sell again, WITHOUT the thing becoming an interest-bearing bond? A conventional bond is a loan: you lend, the issuer owes you your money back plus a fixed coupon. Resolution 137 is the OIC's settled statement of how you build the halal alternative — the leasing ṣukūk — and, just as importantly, where the line is that keeps it halal.
THE ONE FACT EVERYTHING HANGS ON. A leasing ṣukūk is ownership, not debt. The resolution defines it as 'documents of equal values representing common shares in the ownership of income-producing assets or usufructs,' and states the purpose plainly: 'The purpose of Ṣukūk al-Ijārah is to transfer the assets and usufructs relating to the lease contract to securities (Ṣukūk) that can be traded in secondary markets.' The whole idea, it says, 'is based on the concept of "securitization," which refers to the issuance of tradable securities representing income-producing assets.' So when you hold a ṣak (the singular of ṣukūk) you own a slice of a genuine leased asset and are entitled to a slice of the rent it earns. That is the difference between an Islamic ṣukūk and a Western bond, and the six reader-tests below are just that difference viewed from six angles.
TEST 1 — IT MUST REPRESENT A REAL, TANGIBLE, LEASED ASSET (not money, not a debt). The resolution is explicit: 'Ṣukūk al-Ijārah do not represent a specific amount of money or a debt owed by a particular party' — instead each is 'financial security representing a common portion (share) in a usable asset such as a building, an aircraft, or a ship.' Issuance and trading are permissible 'provided that the assets satisfy the conditions which permit their leasing (being, for instance, a building, an aircraft, or a ship), as long as the Ṣak (singular of Ṣukūk) represents ownership of tangible assets that are leased for yielding income.' If a so-called ṣukūk actually represents a pile of cash or a receivable owed by someone, it is a bond wearing an Arabic name.
TEST 2 — THE MARKET PRICE FLOATS FREELY (because you are selling a real asset). Because the ṣak is ownership of a thing, not a fixed claim to money, its price is whatever the market will bear. The resolution: 'It is permissible for the owner of the Ṣak to sell it in a secondary market to any buyer against a price mutually agreed upon regardless of whether such price is equal to, less than, or more than the purchase price, because prices of assets are always governed by the market forces (supply and demand).' A fixed redemption value guaranteed by the issuer would be the tell of a disguised loan; a freely-floating asset price is the mark of genuine ownership.
TEST 3 — YOUR RETURN IS THE ACTUAL RENT, NET OF COSTS. What the holder earns is not a coupon but the asset's real rental income. The resolution: 'The owner of the Ṣak is entitled to its share in the return – which is the rent – at the due dates indicated in the issuance prospectus, after deducting the costs and expenses incurred by the owner or lessor as per the lease contract.' The return is defined by the lease and reduced by the real costs of owning and leasing the asset — not a pre-promised percentage on your capital.
TEST 4 — THE ISSUER MAY NOT GUARANTEE PRINCIPAL OR RETURN (the litmus test, and where most 'ṣukūk' fail). This is the sharpest line in the resolution and the one the modern market most often crosses: 'The issuer or manager of Ṣukūk al-Ijārah should not guarantee the principal or return of the Ṣukūk, and in case of total or partial damage of the leased assets, the loss has to be borne by the Ṣukūk holders.' Real ownership carries real risk. If the leased asset is damaged or destroyed, the holders bear the loss — because they are the owners. A structure in which the issuer promises to buy the ṣukūk back at face value, or otherwise underwrites your principal and yield come what may, has converted ownership back into a loan with interest. (This is the same principle Resolution 123 applies to the investment account: the working party is a trustee, not a guarantor of capital.)
TEST 5 — SUB-LEASING ṢUKŪK ARE FINE, BUT ONLY BEFORE THE SUB-LEASE IS SIGNED. The resolution permits a leaseholder who holds the right to sub-lease to securitise the usufruct he owns: 'It is permissible for a leaseholder who has the right of sub-leasing to issue Ṣukūk al-Ijārah representing common shares in the usufructs that he owned through leasing.' But it draws a precise line in time: 'if the leaseholder has already signed the contracts with the sub-lessees, it would not be permissible for him to issue the sub-leasing Ṣukūk as these Ṣukūk would represent debts owed by the sub-lessees to the lessor or issuer.' Once the sub-lease is signed, what is left to securitise is a receivable — a debt — and trading a debt at anything but par is riba. Before signing, you are securitising a usufruct you own; after signing, you would be selling a debt. Same asset, opposite ruling, decided by the timing.
TEST 6 — WHAT THE ACADEMY DELIBERATELY DID NOT SETTLE HERE (an honesty marker). Rulings are trustworthy partly because they say where they stop. Resolution 137 closes with a Recommendation to hold 'a specialized seminar, in coordination with the concerned financial institutions to study Shariah rulings on forms of Ṣukūk al-Ijārah presented in some of the research papers, and not covered by this resolution' — naming two it did NOT decide: (i) 'The ruling on Ṣukūk al-Ijārah that represent assets leased on "lease ending with ownership" to the person from whom the assets are purchased' (i.e. sukuk built on a sale-and-lease-back to the original owner — the sale-and-leaseback structure that later became the most contested corner of the sukuk market), and (ii) 'The ruling on the issuance and trading of Ṣukūk al-Ijārah of described assets that are yet to be constructed (mawsufah bi al-dhimmah).' So if a product's ṣukūk rests on a sale-and-leaseback to the originator, or on assets not yet built, Resolution 137 by its own words does not bless it — a later ruling would.
WHERE THIS SITS IN THE CORPUS. Resolution 137 completes the corpus's map of a riba-free financial life. The home-finance anchors (40-41, 110, 136) cover how you BORROW-TO-OWN; Resolution 123 covers where you PARK savings; Resolution 137 covers the tradable-security layer — how a real leased asset can be turned into something a market can price and a Muslim can hold, provided it stays ownership of a real thing, the price floats, the return is genuine rent, and no one guarantees your principal. It also pairs naturally with Resolution 110 (lease-to-own / ijarah muntahia bittamlik): 110 defines the lease that ends in ownership; 137 is the securitisation of the lease itself, while honestly flagging that sukuk built ON a lease-ending-with-ownership sale-back were left for a future ruling. Read together, the two ijara rulings and the two profit-sharing rulings give the reader a complete, primary-sourced frame for judging any 'halal bond', 'sukuk fund' or 'Islamic fixed-income' product against the Academy's own words rather than the marketing.
Wording inside quotation marks is quoted from the source. The rest is this notebook’s summary of it — read the original before relying on it.
Provenance
- Compiled from
- Compiled 2026-07-18 from the International Islamic Fiqh Academy's OWN OFFICIAL ENGLISH text of the resolution, read on TWO independent published surfaces and cross-checked verbatim between them: [1] the Academy's OFFICIAL ENGLISH EDITION, 'Resolutions and Recommendations of the International Islamic Fiqh Academy' (official edition, October 2021, published by the Academy at iifa-aifi.org), which prints the ruling as 'Resolution No. 137 (3/15) / Ṣukūk al-Ijārah (Leasing Bonds)', with the session line 'holding its 15th session in Muscat, Sultanate of Oman, on 14–19 Muḥarram 1425h (6–11 March 2004)'; and [2] the Academy's LIVE ENGLISH WEB PAGE for the same resolution at https://iifa-aifi.org/en/32880.html, which reproduces the same operative text. HONEST SOURCING LABEL: this is NOT a two-independent-TRANSLATION gold pairing, and it cannot be — the IRTI/IDB printed English edition covers only the resolutions of 1985–2000, and Resolution 137 is a 15th-session (March 2004) ruling, so it lies outside that edition's range (the same constraint that applies to Resolutions 123 and 136). What is offered instead is the Academy's single official English text confirmed on two of the Academy's own published surfaces (print edition + live site) that agree on every span quoted here. Every embedded quotation was machine-verified as an exact substring of the official-edition text extraction (de-hyphenated, quote-folded, whitespace-collapsed) before this entry was written; any span that failed would have aborted the build (17/17 spans passed).
- Source
- PRIMARY RULING (full title, session/city/dates, and the operative content — the securitisation concept and definition of leasing ṣukūk, the ownership-not-debt rule, registered/bearer forms, the permissibility of issuance and negotiable trading of ṣukūk over leasable tangible assets, the free-floating secondary-market price, the rent-net-of-costs return, the sub-leasing timing rule, the no-guarantee-of-principal-or-return rule with loss falling on holders, and the closing Recommendation naming the two forms left for a future ruling) from the INTERNATIONAL ISLAMIC FIQH ACADEMY (OIC), read on two of the Academy's own official-English surfaces that agree verbatim: [1] the OFFICIAL ENGLISH EDITION, 'Resolutions and Recommendations of the International Islamic Fiqh Academy' (official edition, October 2021), printing the ruling as 'Resolution No. 137 (3/15) / Ṣukūk al-Ijārah (Leasing Bonds)', 'holding its 15th session in Muscat, Sultanate of Oman, on 14–19 Muḥarram 1425h (6–11 March 2004)'; and [2] the Academy's LIVE ENGLISH WEB PAGE for the resolution, https://iifa-aifi.org/en/32880.html. HONEST LABEL: not a two-independent-translation gold pairing (impossible here — the IRTI/IDB printed edition ends at year 2000 and this is a 2004 resolution); one official English text confirmed on two published Academy surfaces. Every quotation machine-verified as an exact substring of the official-edition extraction before writing (17/17 spans).
- School / basis
- Cross-madhab / collective-ijtihad (the International Islamic Fiqh Academy of the OIC is a supra-madhab body of assembled senior scholars; its resolutions represent collective ijtihad rather than a single school's position). Resolution No. 137 (3/15), 15th session, Muscat, Sultanate of Oman, 14–19 Muḥarram 1425H (6–11 March 2004). Operative content, verbatim from the Academy's official English edition (Oct 2021), re-confirmed on the Academy's live English web page (iifa-aifi.org/en/32880.html). DEFINITION (¶1) — the idea 'is based on the concept of "securitization," which refers to the issuance of tradable securities representing income-producing assets'; leasing ṣukūk are 'documents of equal values representing common shares in the ownership of income-producing assets or usufructs.' NOT DEBT (¶2) — they 'do not represent a specific amount of money or a debt owed by a particular party' but a 'common portion (share) in a usable asset such as a building, an aircraft, or a ship.' TRADABILITY (¶4) — permissible to issue and trade 'provided that the assets satisfy the conditions which permit their leasing ... as long as the Ṣak (singular of Ṣukūk) represents ownership of tangible assets that are leased for yielding income.' FREE PRICE (¶5) — the owner may sell in a secondary market 'regardless of whether such price is equal to, less than, or more than the purchase price, because prices of assets are always governed by the market forces (supply and demand).' RETURN (¶6) — the holder is entitled to its share in the return 'which is the rent ... after deducting the costs and expenses incurred by the owner or lessor as per the lease contract.' SUB-LEASING (¶7) — permitted before the sub-lease contracts are signed; 'if the leaseholder has already signed the contracts with the sub-lessees, it would not be permissible for him to issue the sub-leasing Ṣukūk as these Ṣukūk would represent debts owed by the sub-lessees to the lessor or issuer.' NO GUARANTEE (¶8) — 'The issuer or manager of Ṣukūk al-Ijārah should not guarantee the principal or return of the Ṣukūk, and in case of total or partial damage of the leased assets, the loss has to be borne by the Ṣukūk holders.' EXPRESSLY LEFT OPEN (Recommendation) — sukuk on assets leased under 'lease ending with ownership' to the person they were bought from, and sukuk of described-assets-yet-to-be-constructed (mawsufah bi al-dhimmah). Closing invocation: 'Indeed, Allāh is All-Knowing.'
- Captured
- 2026-07-18
- Added
- 2026-07-18
- Trust
- Primary or near-primary source with a stable public URL.
Compiler’s note
The corpus's primary-OIC anchor for SUKUK — the halal alternative to the interest-bearing bond — completing the map begun by the home-finance anchors (Res 40-41 murabaha, Res 110 ijara, Res 136 diminishing mushārakah) and the pooled-investment anchor (Res 123 Muḍārabah account). WHY THIS ONE: it was the named next candidate after Res 123, it is settled (a clean 'Resolves' with eight numbered clauses, not a postponement — verified on disk), it is squarely on-theme for a riba-free-investing corpus, and it is the ruling Res 110 had flagged (Res 110 postponed the lease-securitisation question; Res 137 is where the Academy took it up). SIX reader-tests, each from the resolution's own words: (1) must represent a real tangible LEASED asset, not money or a debt — 'do not represent a specific amount of money or a debt'; (2) the secondary-market price floats freely 'because prices of assets are always governed by the market forces'; (3) the return is the actual rent 'after deducting the costs and expenses'; (4) THE LITMUS TEST — the issuer 'should not guarantee the principal or return' and holders bear asset-damage loss (most modern 'sukuk' fail exactly here via repurchase undertakings); (5) sub-leasing ṣukūk are valid only BEFORE the sub-lease is signed, else they become tradable debt; (6) the resolution honestly leaves two contested forms for a later ruling — sale-and-leaseback-to-originator sukuk and described-asset-not-yet-built (mawsufah bi al-dhimmah) sukuk. SOURCING (honestly labelled): the Academy's own official English on two published surfaces that agree verbatim — the official Oct-2021 edition PDF + the Academy's live English page iifa-aifi.org/en/32880.html. NOT a two-independent-translation gold pairing and it cannot be: the IRTI/IDB printed edition covers only 1985–2000 and Res 137 is a March-2004 ruling (same constraint as Res 123/136). All 17 verbatim spans machine-verified against the official-edition extraction (build_res137.py canon = de-hyphenate + fold quotes/dashes + collapse whitespace, then substring; the body slice guards against matching the table-of-contents entry). DROPPED per no-fab: no madhab tally, no vote count, no Qur'an verse (none cited), no hadith number, no market/AUM/rate figure, no provider graded (the six tests are for the reader to apply). GLOBAL-FIRST: a universal contract-law/securities ruling, no market-specific content and no AU baseline. NEXT candidate: Res 30 (4/5) 'Muqāraḍah (Muḍārabah) and Investment Certificates' if genuinely uncovered (it is cross-referenced by Res 123 ¶12 on third-party guarantees — VERIFY 'Resolves' on disk first and check it is not already covered), or another SETTLED muamalat ruling not in the covered set. AVOID deferrals Res 122 (4/13) and Res 124 (6/13), both postponements.
Topics
islamic-financeribasukuksukuk-al-ijarahijarah-sukukleasing-bondsislamic-bondssecuritizationsecuritisationasset-backedownership-not-debtusufructijarahleasesale-and-leasebacksub-leasingsecondary-markettradable-securitiesno-principal-guaranteeno-guaranteed-returnrisk-sharingloss-borne-by-holdersrentrental-incomemawsufah-bi-al-dhimmahlease-ending-with-ownershipislamic-fixed-incomesukuk-fundsubstance-over-formdebt-tradingprohibition-of-ribainterestoiciifafiqh-academycollective-ijtihad
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