Comparison of Quantitative Shari'ah-Compliant Screening Methods

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ISBN/ISSN: 0128-1976 (Printed) | E-ISSN 2289-4365
Pages: 20
Year: 2011


This publication is part of the journal ISRA International Journal of Islamic Finance (English Journal) (2011-2)

Different screening methodologies have been developed in the market to screen for Shari'ah-compliant investments. The Shari'ah screening processes are deemed important for investors to avoid prohibited activities and to select investments in permissible businesses in accordance with Islamic principles. This paper reviews the Shari'ah investment screening methodologies of twenty-one worldwide prominent Islamic finance users, including index providers, Shari'ah service providers, fund managers and a regulator. A comparative analysis is performed to highlight the differences and similarities of the Shari'ah-compliant methods and principles used by these renowned institutions. The results reveal that different users have different objectives and functions, reflected in their different screening methods applied. It is believed that greater harmonisation of the worldwide screening methods would assist in further accelerating growth of the Islamic investment sector. This paper thus provides some suggestions on achieving a common and unified screening rule


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