This fatwa discusses several topics, firstly it elaborates on the ethics which Muslims should follow when they are dealing with stock trading. Secondly it discuses the actions to be taken towards the interest earned from bank deposits. Lastly it provides details on the distribution of interest amongst the poor and needy.

1. Question:
As-salam alaikum Mufti Ikram, First of all let me thank you for the lecture you delivered on Islamic Finance in Quincy.It was benefecial. One question that I wanted to ask during the seminar and could not ask due to lack of time was that of Stock trading .Please let me know the ethics which muslims should follow when they are dealing with stock trading Another question is that as it is unlawful in islam to consume the interest earned by keeping money in the bank so what should be done with this interest money Can that be distributed to the poor without the intention of getting reward ? Is there any definition of what is meant by the poor who can consume this interest money ? Before giving this money to the poor muslims should we specifically tell them that this money is interest money as there might be some poor muslim people who might be willing to accept money from sadaka or zakat but not willing to take the interest money. -Majid
Answer: الجواب حامداومصليا
Jazakallahu Khaira for your feedback. May Allah grant you and me the ability to practice on the Deen. The following conditions must meet in order for stock trade to be considered permissible: i) The main business of the company must be lawful (halal). Therefore, to purchase shares of a company whose main business is unlawful, such as interest bearing banks, insurance companies
Category: Business and Trade

2. , lottery, gambling, companies manufacturing and selling liquor, etc will not be permitted. If the main business of the company is Halal, such as a textile company or a telecommunication company, then it will be permissible to subscribe to its shares. ii) Many companies, despite their main business being Halal may be involved in interest dealings in one way or another. Due to this, the following is necessary: a) One should object to the interest dealings, preferably in the annual AGM. By doing so, the responsibility will be deemed fulfilled. b) When the dividend is distributed, the proportion of the company's income which was gained by interest dealings must be given in charity without the intention of receiving reward, as is the case with unlawful money in general. This amount (of interest accumulation) may be known by means of the income statement. iii) The company whose shares one intends to purchase must have some illiquid assets in its possession. It must not be all in liquid form (i.e. cash, checks, bonds, etc...). If all of the company's assets are in liquid form, then the share cannot be sold or purchased except at face value. 2) The money earned through interest must be distributed among poor and needy without the intention of receiving reward. 3) All those who are eligible of receiving Zakah and Sadaqah-e Fitr may be eligible for receiving interest money as well. 4) One is not required to disclose the source of money while giving to poor after having determined the eligibility. But if one feels that the poor person will not be willing to accept interest money they he may not distribute to them. And Allah knows best. Mufti Ikram ul Haq Fatwa Center of America