Core business of the company being invested in must be Halal and in line with the dictates of Shari’a. Hence, investment in securities of any company dealing in conventional banking & finance, conventional insurance, alcoholic drinks, tobacco, pork and other non-halal food products, gambling/gaming, music, movie production, selling of gold & silver jewelry on deferred basis, advertising, arms manufacturing, cloning and pornography or related activities is not permissible.

Note: In cases where the above the non-permissible business activities or sectors constitute less than 5% of total revenue of a company (this is known as the 5% rule) then such companies shall not be excluded from the Halal List.

The ratio of Non-compliant income to Total Revenue should be less than 5%. Total Revenue includes Gross Revenue plus any other Income earned by the company.

Note: Non-compliant income below the above threshold should be purified by removing the relevant proportion from received dividends and donating the same to charity.

The ratio of Non-Liquid Assets to Total Assets should be at least 20%. Non-Liquid Assets, here are defined as any asset that Shari’a permits to be traded at a value other than its par value.

The Market Capitalization should be greater than the Net Liquid Assets calculated as:
Total Assets – Non-Liquid Assets – Current Liabilities.