Legal Status of Index Derivative Instruments

There is for a short time that، by virtue of the article 1 (11) of IRI Securities market Act 1384، financial derivatives market in which future contract and option contract are offered، has started to establish on a limited level. The threshold revenue in such contracts may take the form of goods or securities. From viewpoints of Iranian legal system and Islamic jurisprudence، such contracts have proven to be valid irrespective of their subject (the underlying asset) however the validity of those derivative contracts the underlying asset of which shall be the index has continued to be doubtful. While rejecting the legal opinions raised by now concerning non-validity of financial derivatives made on the index، this article seeks to explain its nullity on a different approach. The outputs of this research shall، inter alia، be: the nullity of index contracts for impossibility of its ownership، its valueless and the lack of the very idea of ‘bargain’ in such contracts. As well as، the article contains a way to validate the contracts concluded upon index.