How Islamic equity is walking the screening tightrope
Islamic equity screening is at heart of halal investing - it demystifies a permissible stock, shapes how Shariah-compliant funds and indices are constructed, and underpins investor confidence across a global equity market worth around $6 trillion in assets.
At its core, screening occurs at the intersection of Islamic jurisprudence, accounting practices, and market mechanics. While most frameworks share the same foundational principles, differences in interpretation and implementation remain, raising critical questions pertinent to consistency, transparency and the overarching purpose of the underlying investment.
Common ground, diverging interpretation
Globally, Islamic equity screening is governed by a handful of key frameworks including the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) in Bahrain and Malaysia’s Securities Commission (SC), as well as rules devised by major stock index providers like S&P Dow Jones, MSCI or FTSE.
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Hassan Jivraj