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Franchise of a Share Trading Company

Answered as per Hanafi Fiqh by Darulihsan.com
These traders are called Clients. We get a percentage of the brokerage fee as agreed between us and the Share Trading Company.

Kindly tell me is this kind of business is permissible in Islam…

Haamidaw wa Musalliyaa

The brokerage fee earned from permissible transactions is permissible. However, earning a brokerage from impermissible transactions such as the sale of futures, options, the sale of shares that have not yet been transferred etc, or from the sale of shares which are prohibited, such as the shares of Haram industries, conventional banks, conventional insurance companies etc, is impermissible and such earnings are prohibited in the Shariah. Hence, one must consult closely with competent Ulama and transact carefully to ensure that one’s earnings are indeed permissible and not tainted with Haram.

And Allah Ta’ala Knows Best

Shafiq Jakhura (Mufti)
Fatwa Dept.

This answer was collected from DarulIhsan.com. It’s the official website of Darul Ihsan, which is an Islamic organisation (PBO) based in Durban, South Africa.

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