Analysis of the nature and function of social transactions from the perspective of compliance with Sharia

The difference between developed and underdeveloped economies can be found in the degree of efficiency of their financial system. One of the components of expanding the capital market is the development of financial instruments. In Islamic countries, conventional capital market tools that rely on usury, gambling, etc. don’t work. Therefore, the thinkers of Islamic societies tried to invent tools that are in accordance with the principles of Sharia and have economic efficiency. As part of fintech, social trading provides a platform for sharing information, which allows novice investors to observe and imitate the trading strategies of expert traders by spending less trading costs. Considering the advantages and importance of these transactions in the financial markets, the present research, while introducing social trading as a new strategy, examines these transactions from the perspective of the rules governing Islamic financial instruments and economic criteria with jurisprudential and descriptive analysis methods. The results show that social trading and their types are valid contracts due to the fact that they meet the conditions of the validity of contracts and are free from jurisprudential obstacles (unjust enrichment, uncertainty, loss and damage, gambling and usury). From an economic point of view, these transactions are in accordance with the diverse goals and moods of investors, in line with economic growth and justice, and have the ability to be used in the financial policies of the government. Therefore, Islamic societies can take a step for the development of financial markets by adopting a suitable mechanism to use social trading.