Details of the decision to suspend trading in stocks and movable assets in Saudi Arabia

The General Authority for Endowments in the Kingdom of Saudi Arabia has approved a pioneering regulatory step by authorizing the endowment of shares and movable assets, in addition to usufruct and shares in commercial companies, in accordance with precise Sharia and legal controls. This strategic regulatory step aims to maximize the developmental impact and ensure the sustainability of endowments to keep pace with the rapid economic and investment developments the world is witnessing today.

The development of the endowment sector and keeping pace with economic changes

Historically, the concept of waqf (endowment) in Islamic civilization was closely linked to fixed assets such as real estate, farms, and wells, playing a pivotal role in financing vital sectors like education, health, and social welfare. With the tremendous evolution of modern economies and the emergence of new financial instruments, the urgent need arose to modernize waqf mechanisms to encompass more flexible assets. The decisions of the General Authority for Endowments aim to reshape this vital sector, expanding its scope from the limited traditional framework to broader investment opportunities, thus ensuring that waqf remains a fundamental and effective pillar of the contemporary Islamic economy.

Controls for suspending benefits and physical assets

The Authority explained in its guide that the endowment of usufruct is a permissible form of charitable endowment (waqf) in Islamic law, reflecting the flexibility of the endowment sector. It cited as an example the endowment of the right to use a house or property for a specific period to serve the needy or students of knowledge, while the owner or their heirs retain ownership of the property itself. The guide also highlighted a precise regulatory ruling concerning the endowment of usufruct when no specific time limit is set; in this case, the endowment automatically follows the usufruct, thus taking on the rulings of an endowment for the duration of its existence to ensure the continuity of its benefits. Regarding tangible assets, the Authority clarified the possibility of endowing various movable assets such as cars, production lines, and electrical appliances, provided that they can still be used while retaining their physical form, allowing for their effective utilization in developmental and charitable initiatives.

Conditions for suspending shares and movable assets in commercial companies

In the area of ​​financial investments, the Authority affirmed the permissibility of dedicating shares, movable assets , and company stakes to expand the resources available for charitable work. It stipulated a fundamental condition requiring these companies to conduct legitimate activities fully compliant with the regulations in force in the Kingdom. The Authority concluded its regulatory clarifications by emphasizing the necessity for these shares and stakes to generate real financial returns, noting that these returns will be directed directly to the designated endowment funds to ensure the efficient and effective achievement of its social objectives.

The developmental and economic impact of diversifying endowment assets

This legislative shift is of paramount importance and is expected to have a far-reaching impact at both the local and regional levels. Locally, this decision aligns closely with the objectives of Saudi Vision 2030, which aims to maximize the contribution of the non-profit sector to the GDP. By permitting the endowment of shares and stocks, business owners and investors are given a golden opportunity to contribute to social solidarity without having to liquidate their commercial assets, thus creating a sustainable financing model for charitable associations and institutions. Regionally and internationally, this regulation presents the Kingdom as a pioneering legislative model to be emulated in modernizing the jurisprudence of endowment financial transactions, thereby reinforcing its position as a global leader in developing the Islamic economy and innovating sustainable financial solutions that serve humanity.