Declaration of Conceptual Model of Islamic Commercial Papers for Manufacturing Corporations

Financial instruments are essential for economy and financial markets to facilitate the flow of funds from the surplus unites, that want to save and invest their money, to the deficit units that need money for their investment opportunities. Financial instruments help investors earn a proper return on their investments and, finances and boost the current activities and development of corporations.Nowadays, a variety of financial instruments are designed and issued in financial markets to provide financial needs of corporations. Commercial Papers are one of the most important of these instruments that provide a significant portion of corporation’s financial needs. Commercial paper is a key financial instrument for short term financing. Since commercial paper, like many other conventional financial instruments, has been structured and issued in western financial markets, because of sharia regulations and conditions, it is not allowed for Islamic markets. But islamic rules and jurisprudence (fiqh) are flexible enough to permit the use of commercial paper based on various allowed contracts. In this paper, we try to develop a conceptual model of Commercial Paper, applicable for manufacturing corporations, that complies with islamic rules and regulations.