Forex trading has been growing rapidly in Pakistan in the last couple of years, with hundreds of traders joining in daily. However, there are always questions that new traders have in mind before getting in on the action of forex trading in Islam.
Namely, these questions primarily revolve around if forex trading is legal in Pakistan and if it’s religiously approved according to Islamic law. This means that most Pakistani traders want to know if forex trading is legal according to Sharia law before they start trading.
So, in this article, we will be covering all these important questions that Pakistani traders may have in mind. In addition to this, we will also be discussing the difference between unregulated and regulated brokers, so you’ll know which direction to go in before taking your first steps in forex.
Is Forex Trading Legal in Pakistan?
Let’s start with the most basic question—is it legal? The answer to that is yes, forex trading is totally legal in Pakistan.
There are essentially no limits to forex trading in Pakistan. Of course, there has been some action taken by the Securities and Exchange Commission of Pakistan (SECP) to reduce the risk of financial fraud and money laundering in the forex market. So far, we’ve covered only the legal aspect of forex trading in Pakistan.
Is Forex Trading Legal According to Islamic Law?
Although forex is legal according to Sharia law, there is a more complicated answer to this question. According to Islamic law, forex trading is halal as long as you keep a few important and morally-acceptable practices in mind.
First of all, it is essential that you only use an interest-free forex account. As it is well known, interest is haram in Islam, and there is no exception to that rule. As such, it's essential to understand how Pakistan taxes forex trades.
Secondly, it is important that you avoid using online forex trading as a gambling tool. This means that you should only invest after you’ve become somewhat knowledgeable in the field, so you’re not gambling.
So, as long as these basic conditions of trading forex are met, you can trade with peace of mind knowing that it is halal.
How Available Is Forex Trading In Pakistan?
Forex trading is prevalent in Pakistan, with many open market tools and insightful forex resources available for Pakistanis to choose from.
Namely, there are online brokers that are trusted by millions of people, and there are other trading platforms that accommodate specific types of trading. This means that there is an abundance of options available for trading in Pakistan, and if one looks for a specific broker for their needs, they can easily find one that is trusted by many.
Regulated Forex Brokers in Pakistan
You might be asking, what is the difference between regulated and unregulated brokers?
Well, the difference is quite simple: regulated brokers are the ones that are registered with a regulatory body in their country.
This means that the registered brokers in Pakistan are approved by the Securities and Exchange Commission of Pakistan (SECP).
It’s well-known that there are risks of going for unregulated brokers, as they can be scammers or market makers. It is always advisable to go with a registered broker for safe trading, whether you plan on trading forex or other assets like Pakistan stocks.
There are many registered and legal forex brokers in Pakistan. Let’s take a look at two of them.
- FXTM Widely regarded as one of the best forex brokers in Pakistan.
- AvaTrade This forex & stock trading platform has a reputation for being great for beginners
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