---
title: "What is Shariah screening? | IslamicOpenFinance™"
description: "Checking whether a company's business and finances meet Shariah criteria before it can be held in an Islamic fund or index."
url: https://islamicopenfinance.com/glossary/shariah-screening/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Sukuk and capital markets](https://islamicopenfinance.com/glossary/#sukuk)

Sukuk and capital markets

# Shariah screening

Checking whether a company's business and finances meet Shariah criteria before it can be held in an Islamic fund or index.

Shariah screening is the process of assessing securities against Shariah criteria before they are included in an Islamic fund, index or portfolio. Screens typically combine a business activity test, excluding prohibited sectors, with financial ratio tests on matters such as interest-bearing debt and income from non-compliant sources, and the thresholds differ between standard setters and index providers. IFSB-24 lists screening processes among the Shariah matters that should be disclosed to investors.

## Sources

- [IFSB-24 Guiding Principles for Investor Protection in Islamic Capital Markets, 2020: disclosure of Shariah screening processes](https://www.ifsb.org/wp-content/uploads/2023/10/IFSB-24_En.pdf)

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

## Related terms

[**Islamic collective investment scheme** An Islamic fund: investors pool money in units of equal value, managed under Shariah rules, sharing in the fund's profit or loss.](https://islamicopenfinance.com/glossary/islamic-collective-investment-scheme/) [**Purification of income** Giving away, usually to charity, income from a non-compliant source or a Shariah breach, so the institution does not benefit.](https://islamicopenfinance.com/glossary/purification/)

**Sukuk and capital markets**

1. [Sukuk](https://islamicopenfinance.com/glossary/sukuk/)
2. [Sukuk al-ijarah](https://islamicopenfinance.com/glossary/sukuk-al-ijarah/)
3. [Sukuk al-musharakah](https://islamicopenfinance.com/glossary/sukuk-al-musharakah/)
4. [Sukuk al-mudarabah](https://islamicopenfinance.com/glossary/sukuk-al-mudarabah/)
5. [Sukuk al-wakalah](https://islamicopenfinance.com/glossary/sukuk-al-wakalah/)
6. [Periodic distribution](https://islamicopenfinance.com/glossary/periodic-distribution/)
7. [Islamic collective investment scheme](https://islamicopenfinance.com/glossary/islamic-collective-investment-scheme/)
8. [Asset-backed and asset-based sukuk](https://islamicopenfinance.com/glossary/asset-backed-sukuk/)

[All 221 terms](https://islamicopenfinance.com/glossary/)