A investment instrument that is based on profit and loss sharing, asset-backed transactions, and risk-sharing contracts, and certain types include sukuk, equity-based funds, and commodity trading). This represents investment instruments or securities traded on the Islamic capital market (ICM) include products such as Islamic stocks, equity-type and debt-type sukuk, and Islamic mutual funds. These instruments are strictly screened for impressibilities, specifically riba (usury, interest, etc.), maisir, gharar, speculative elements and the issuers must not engage in illicit activities such as gambling, arms trafficking, or environmentally harmful activities.

Certain long-term Islamic capital market instrument are typically based on diminishing musharakah or musharakah mutanaqisah. These modes may involve partnerships between two partners, a bank which acquires an asset or group of assets from a partner (a non-bank) gradually over a long period of time (in the form of shares of ownership). The return or profit arising from the asset will be shared as per an adjustable percentage in each period until final transfer of ownership.

Shari’ah investment needs and areas of deployment can be brought together or matched by means of the Islamic capital market as an alternative to the conventional capital market.