Subject: Is Conventional Brokerage and Portfolio Management Service Halal?
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 in the stock market. Broker takes commission for each transaction that it facilitates. Broker usually provide execution service. It also helps a seller find a buyer or vice versa. 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?
Please share your knowledge, so that I can find the hala way.
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
Allah Ta’ala says:
ولا تعاونوا على الإثم
Translation:
And do not assist in sin. [Surah Al-Ma`idah: 2]
It is impermissible to facilitate such transactions as that will be assisting in sin. Therefore, working in such company will be not permissible.
However, if you do not have any other source of income and you are in dire need, then you may continue with this employment while actively searching for an alternate halal job, and also make sincere tawba and dua to Allah.
May Allah provide you halal sustenance. Ameen [2]
And Allah Ta’āla Knows Best
Anas Sharieff Qasmi.
Student Darul Iftaa
Hyderabad, India.
Checked and Approved by,
Mufti Ebrahim Desai.
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[1]المحيط البرهاني في الفقه النعماني (7/ 482)
والإجارة على المعصية باطلة؛ ولأن الأجير مع المستأجر يشتركان في منفعة ذلك فتكون هذه الإجارة واقعة على عمل هو فيه شريك
[2] [فتاویٰ محمودیہ 25:256] جو کام ناجائز ہے اس کام کی نوکری کرنا بھی نہ جائز ہے،اور دوسرا ذریعہ معاش تلاش کر لے اور اس نوکری کو چھوڑدے .