AAOIFI
Shariah Standards AuthorityAccounting and Auditing Organization for Islamic Financial Institutions
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Our Stock, ETF, and Sukuk (Islamic Bonds) Screening Methodology
At Musaffa, our qualitative and quantitative screening process is guided by AAOIFI Shariah standards. This ensures unified, accurate, and consistently detailed Shariah compliance assessments across stocks, ETFs, and sukuk worldwide.
Shariah Compliance Certificates
Musaffa's stock, ETF, and sukuk screening methodologies are based on AAOIFI Shariah standards and independently certified by qualified Shariah scholars.
AMANAH ADVISORS
Independent Shariah CertificationGlobal Islamic Finance & Fintech Services
Shariah Compliance Certificate
View Shariah Certificate Shariah Compliance Certificate
View Shariah Certificate Shariah Compliance Certificate
View Shariah Certificate Shariah Advisors
Shaikh Dr. Aznan Hasan
Shariah Board member of Accounting and Auditing Organization for Islamic Financial Institutions (“AAOIFI”)
Mufti Faraz Adam
Well-known UK-based Islamic Finance consultant and head of the global Shariah advisory firm Amanah Advisors.
Prohibited Business Activities
Companies involved in these activities are classified as Not Shariah-compliant during Musaffa’s screening process.
Non-halal foods
Non-halal foods
Alcohol
Production & sales
Gambling
Casinos, betting, lotteries
Adult Entertainment
Explicit content
Tobacco
Manufacturing & sales
Marijuana
Recreational cannabis
Weapons
Arms & defense products
Cloning
Human cloning activities
Interest-based Finance
Conventional banking
Excess Debt
High debt ratios
AAOIFI Stock Screening Methodology
Musaffa uses the official AAOIFI Shariah screening methodology to determine if a company’s business activity and financial structure are Shariah-compliant before labeling any stock or ETF as Halal.
Three Core AAOIFI Financial Screening Criteria
1 Non-Permissible Income Ratio
We check the proportion of a company's total revenue that is generated from non-permissible (haram) activities, including interest, alcohol, gambling, pork, and adult content.
Impermissible Revenue ÷ Total Revenue
Not Allowed Halal Zone100%If non-permissible income exceeds 5 percent of total revenue, the stock or ETF becomes Not Shariah-compliant.
2 Interest-Bearing Assets Ratio
We check the proportion of a company's total assets that are held in interest-bearing instruments, such as conventional bonds or interest-bearing cash and deposits.
Interest-Bearing Assets ÷ Trailing 36-Month Avg Market Value
Not Allowed Halal Zone100%If interest-bearing assets exceed 30 percent of market cap, the stock or ETF becomes Not Shariah-compliant.
3 Interest-Bearing Debt Ratio
We check the proportion of a company's total debt that is interest-based, such as conventional loans and bonds.
Interest-Bearing Debt ÷ Trailing 36-Month Avg Market Value
Not Allowed Halal Zone100%If interest-bearing debt exceeds 30 percent of market cap, the stock or ETF becomes Not Shariah-compliant.
Final Decision
A stock or ETF must pass all three AAOIFI financial screening criteria to be classified as Shariah-compliant. Failing any criterion results in a Not Shariah-compliant status.
Income + Assets + Debt=Halal (Shariah-compliant)
Purification (Shariah Requirement)
Purification is the process of removing and donating the non-permissible portion of your investment income. If it is not purified, that amount becomes not Halal (haram) for the investor.
Musaffa automatically calculates the exact purification amount using AAOIFI standards and donates it to your selected charities, helping you fulfill your Shariah obligation with accuracy, ease, and confidence.
Why Purification Is Required Under AAOIFI Standards
AAOIFI Shariah standards allow a company to remain Shariah-compliant even if a small portion of its income (below 5 percent) comes from non-permissible sources, such as incidental interest.
Any income the investor receives from this non-permissible portion must be purified by donating it to charity, as required by AAOIFI.
Purification is a mandatory Shariah obligation for investors, not an optional step.
How Purification Works on Musaffa
Verified and approved by qualified Shariah scholars
- Step 1: Identify
Non-Permissible Income Identified
Musaffa identifies when a company generates incidental non-permissible income that remains within AAOIFI-permitted limits.
You do not need to review financial statements or calculate anything manually. - Step 2: Calculate
Exact Purification Amount Calculated
Your purification amount is calculated automatically based on the company's verified non-permissible income ratio for the period during which you hold the stock or ETF.
No estimates No approximations No manual calculations - Step 3: Donate
Donation and Completion of Purification
You can complete purification across your entire portfolio. All purification actions are securely recorded for full transparency and accountability.