In what cases is it allowed to pay facilities to brokerages?

In May of this year, the Central Bank announced a circular on granting facilities to brokerage companies, investment companies and holding companies for implementation in the banking network.

According to this circular, granting facilities to brokerage companies within the framework of relevant rules and regulations is unrestricted and the maximum total facilities granted to each brokerage company in the entire banking network is equal to five times the shareholders’ equity according to the latest audited financial statements of the company. Also, granting facilities to investment and holding companies within the framework of relevant rules and regulations is unrestricted.

Following this circular, the jurisprudential council of the Central Bank has examined the “contractual basis of facilities granted to brokerage companies” and the Central Bank has announced the approval of this council as follows:

Granting facilities by credit institutions to brokerage companies in the framework of the following is not contrary to Islamic law:

1. The credit institution, in the form of a power of attorney contract, provides facilities to the brokerage company so that the company can provide the credit institution with the applicants in the field of buying and selling shares. In this method, the person receiving the facility will share the shares purchased with the credit institution, equivalent to the facility granted to the credit institution, to which it has been allocated through the brokerage company. In this method, the brokerage company, on the one hand, is the lawyer of the credit institution and on the other hand, is the lawyer of the person receiving the facility (buyer of shares) and proceeds to buy and sell shares.

2- Granting facilities to brokerage companies in the form of Murabaha contract is also possible.