Brokerage Service and Investment banking
Assalamulaikum. I work at a conventional brokerage firm. I have following questions
1. A brokerage firm is a financial institution that facilitates the buying and selling of financial securities between a buyer and a seller. If a buyer (investor) wants to buy a shariah non-compliant stock (i.e. interest based bank or highly levered company) then is it halal to take commission from that trade (for facilitating the trade)?
2. My employer’s (brokerage firm) 50% of the earnings come from conventional margin loan interest (this income is haram). 25% earnings come from the commission for trading shariah non compliant stocks. Is it permissible to work in such company?
3. I am a portfolio manager. My job responsibilities are:
- Managing clients fund on their behalf to generate positive return
- Managing company’s own fund
I have to buy or sell shariah noncompliant stocks on behalf of my clients. I tell them that these investments are haram. Despite my warnings they tell me to ensure higher return whether the investment is haram or halal. As it is my responsibility to generate good return, I have to invest in conventional interest based banks or other noncompiant companies. Is it permissible for me to work in my current position?
I am in extreme stress regarding the above mentioned issues. I want to earn a halal living. Please guide me regarding the above issues according to Islamic shariah.
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
We commend you for your sensitivity on earning halaal and abstaining from haraam. It is this attitude that brings Barakah (blessings) in one’s earnings.
Nabi (ﷺ) said:
طَلَبُ كَسْبِ الْحَلَالِ فَرِيضَةٌ بَعْدَ الْفَرِيضَةِ
Translation: Earning of Halal income is an obligation beyond other obligations.
(Shuabul Imaan, Baihaqi)
It is not permissible for one to be an agent of an interest-bearing loan as this would entail assisting in insurance activities. The commission received from such an agency is not halaal. [1]
Allah Taa’la says:
وَلَا تَعَاوَنُوا عَلَى الْإِثْمِ
Translation: “And do not assist one another in sin”
(Surah Al-Maaidha, Aayah 2)
Consider the following Hadeeth:
عن جابر قال لعن رسول الله صلى الله عليه وسلم آكل الربا وموكله وكاتبه وشاهديه وقال هم سواء
Translation: Jabir (Radhiyallahu Anhu) narrates that Nabi (Sallahu ‘Alaihi Wasallam) cursed those who are involved in usury; whether it is the person who is giving usury, receiving it, writing the transaction or witnessing it.
(Saheeh Al-Muslim)
If you do not have another source of income then, you may continue your employment and make taubah while searching for an alternative job.
We make dua Allah opens His doors of sustenance for you and provide you with all your requirements in a halal manner. Aameen.
And Allah Ta’āla Knows Best
Muhammad I.V Patel
Student Darul Iftaa
Lusaka, Zambia
Checked and Approved by,
Mufti Ebrahim Desai.
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[1] الدر المختار وحاشية ابن عابدين (رد المحتار) (6/ 360)
لما فيه من الإعانة على ما لا يجوز وكل ما أدى إلى ما لا يجوز لا يجوز وتمامه في شرح الوهبانية
المبسوط للسرخسي (16/ 38)
وَالِاسْتِئْجَارُ عَلَى الْمَعْصِيَةِ لَا تَجُوزُ
الهداية في شرح بداية المبتدي (3/ 238)
قال: “ولا يجوز الاستئجار على الغناء والنوح، وكذا سائر الملاهي”؛ لأنه استئجار على المعصية والمعصية لا تستحق بالعقد