What is the ruling on a company funding individuals in Forex, whereby it executes the transactions they perform in a demo account into a real account, and shares the profits with them, with the possibility of withdrawing money at any time?
"Dealing in the Forex market—as described—is not permissible শরعًا (Islamically); due to its inclusion of several prohibitions, among them:
1. Explicit usury (riba) represented by the overnight fees (an increment on the loan amount).
2. The broker's condition upon the borrowing client that their buying and selling must be done through him; which leads to combining a loan with an exchange, and this is in the meaning of combining a loan and a sale. The Prophet, peace and blessings be upon him, forbade that, saying: «A loan and a sale are not permissible together.»
3. In many cases, the broker sells what he does not own.
4. The absence of Shar’i (Islamic legal) instantaneous exchange of currencies in most cases."
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Ftawy
- Original fatwa ID
- 189270
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy