Islamic Finance – Islamic Stock Broking
Services for Islamic stockbrokers Islamic stockbroking services operate under institutional and regulatory frameworks that are comparable to those of traditional stockbroking, but they adhere to Shari'ah principles in all of their operations and services. For instance, Islamic stockbroking services are limited to supporting the creation, trading, and distribution of securities that adhere to Shari'ah, and they also assist institutions in offering margin-financing options that are compliant with Shari'ah. With the help of margin financing, the consumer can buy a specific share on credit. In the future, the customer will later pay the financier a greater selling price. Murabahah margin finance, in which the financier buys the specified shares at price 'x' and sells them to the customer at price 'x+y' due later, is highly popular for this purpose. In Malaysia, BIMB Securities Sdn Bhd (a division of Bank Islam Malaysia Berhad) introduced the first full-fledged Islamic stockbroking service in 1994. It is uncommon to come across a specialised Islamic stockbroking firm in the IFSI of other nations. This is so that any broker of a Muslim investor's choice can invest on their behalf if they are looking for Islamic-compliant companies. This has been made possible by the availability of published lists of Shari'ah-compliant stocks offered by recognized international and local Islamic stock-screening firms and organizations.
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