New to this? How Shariah screening works covers the background this guide assumes, as part of the course.
There is no single global authority that decides which stocks are Shariah-compliant. Three frameworks dominate in practice, and they set different thresholds for the same underlying question: how much conventional debt and interest exposure is tolerable before a company's core business stops being the point.
| Standard | Debt / market cap | Receivables test | Income-purity limit |
|---|---|---|---|
| AAOIFI | < 30% | Yes, < 30% | < 5% of revenue |
| Dow Jones Islamic Market (DJIM) | < 33% | No | < 5% of revenue |
| MSCI Islamic | < 33.3% | No | < 5% of revenue |
The debt ratio thresholds look similar at a glance, but the practical difference that matters most is the receivables test: AAOIFI checks accounts receivable against market cap; DJIM and MSCI don't. That's not a rounding difference. It's the exact ratio that flipped Zimplats Holdings (ZIM) from a clean pass to non-compliant in our own ASX screen: debt and cash both sat comfortably under 30%, but receivables ran at 32.4% of market cap, which only AAOIFI's methodology catches.
Why this matters practically
If a screening tool doesn't tell you which standard it's using, you can't actually compare its results to anyone else's. "Halal" or "not halal" on its own is an incomplete answer. This screener uses AAOIFI throughout, the strictest of the three on the receivables question, and states that plainly on every stock rather than presenting a single unexplained badge.
The other place standards diverge is judgment calls that no ratio settles: a shipbuilder with defence contracts, a comms company with a tactical-communications division, a pre-revenue miner whose only "revenue" is interest on its cash. We mark these "review" rather than a clean pass or fail, because a single-word verdict would be false precision. See the next guide for real examples of exactly this.
For the full criteria list and links to AAOIFI, S&P and MSCI's actual methodology documents, see the Methodology page rather than taking this summary as the last word.