This fatwa acknowledges that a bond (a long-term debt-based security issued by a public company to a bond-holder that obliges the public company to pay periodic-interest and repay the principal to the bond-holder) is a conventional capital market investment instrument. It distinguishes a shari'a bond as a long-term security issued by a public company to a shari'a bond-holder that obliges the issuer to pay as income to the shari'a bond-holder a share of the profit, margin or fee, and to repay the bond by a certain maturity date.
The fatwa defines a mudharabah shari'a bond as a shari'a bond based on a mudharabah agreement, taking heed of the content of Fatwa No. 7 of 2000 on Mudharabah Financing.