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Brokers - Shariah Compliance Questions

Salem alikoum, I am French and looking for a broker to invest in long-term stocks do you have a broker to offer me who is compatible with Islamic finance,barakallahofikom

Why don’t you just do it yourself? They Zoya app can’t help you find halal stocks and ETF’S.

Iam not looking for stocks, but a broker, do you have a broker to offer me,barakallahofikom ,sorry I use a translator

I know American brokers but none french ones , I googled and found these

  1. Interactive Brokers is the best international online brokers in France in 2022. Low trading fees. Wide range of products. Many great research tools.
  2. DEGIRO takes second place. One of the lowest fees on the market. Regulated by top-tier authorities. Easy-to-use web and mobile platform.
  3. Saxo Bank rounds out the top three. Great trading platform. Outstanding research. Broad product portfolio.
  4. XTB is numero quattro. Low forex CFD fees, commission-free stocks/ETFs for some. Free and fast deposit and withdrawal. Easy and fast account opening.
  5. eToro just made it to the list in fifth place. Free stock and ETF trading. Seamless account opening. Social trading.

In addition to the list @osama shared above, I will shamelessly plug the upcoming Zoya Invest service which will be available to France residents as well. :slight_smile:


thank you, in the list I know that degiro takes an interest of _0.5 on the uninvested cash, so I do not think that this is allowed? and for the other brokers I do not know them but it is to verified.thank you

Salem alikoum I found a broker but I don’t know if the way he gets paid is allowed. First of all, like some so-called “free” brokers, the broker earns money by reselling your stock market orders. Your stock market orders are transmitted not to the “market” but to “high frequency traders” who earn a few cents on your stock market order. barrakallahofikom

There’s a saying that if you’re not paying for a product, then you are the product. Facebook and Instagram are free to use, for example, but they’re essentially using your data to bombard you with ads, not to mention selling your personal data.

With many commission-free brokers, this is also the case. You’re not paying commission. But there’s a catch: The broker is selling your order data to market makers / funds / HFTs that can front-run your trades.

For example, say you put a big limit order to sell TSLA at $900, the fund could theoretically see this order, and put an even bigger limit order at, say $899, so the price doesn’t hit $900 and you don’t get filled.

Of course, the market makers aren’t necessarily bad. If a bunch of people want to sell TSLA, someone has to be buying it, and that’s what market makers do: they might buy their TSLA shares and then sell them back to people for a tiny profit per share. This tiny difference between what people want to buy and sell their stocks is known as the spread.

I believe many brokers have a “Pro” version where you can pay commissions, and your data would then not be shared. I know IBKR has a “Pro” version that isn’t commission-free.

But selling order-flow data is standard practice in the business. I don’t think it’s wrong per se. Where it is wrong is if funds are using the data to front-run your trades. But if it’s simple market making / providing liquidity, then I don’t see the harm.

Wallahu a3lam.

Recommend checking out this article for details: Robinhood Sells Your Data, but Does That Matter? - Blockworks

Salem alikoum, for degiro, the bank takes a negative interest of 0.5 on the uninvested cash and degiro compensates for losses linked to the negative interest of the cash account in the first tranche of € 2,500 held in your account in your local currency (EUR). Losses related to the negative interest rate on amounts over € 2,500 will not be compensated, so I don’t think this practice is allowed, I specify I have no knowledge of Islamic finance, but I know that ribaa is prohibited

what do you think?

I mean if it looks like a duck and quacks like a duck and walks like a duck, it’s a duck.
What you’re describing, sounds like textbook Riba. If that’s the only choice you have within Degiro, I’d avoid it and maybe go for another broker. And God knows best.

I highly recommend Interactive Brokers (IBKR) as @osama suggested. It’s pretty well known amongst the international community. I personally use IBKR and it’s very feature rich.

Most brokers pay interest for uninvested cash balance. You can ask them that you would like to to opt out from receiving interest because it doesn’t fit your investment strategy.