Stock Screening Process for Shariah Compliance: Global Practices
Stock screening process for Sharīʻah compliance refers to a certain process to select the stocks and shares accordingly and to make them enlisted as Sharīʻah compliant stocks. Using discussion and analytical method this article comparatively discusses several methodologies to screen for Sharīʻah...
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| Main Author: | |
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| Format: | Article |
| Language: | ta |
| Published: |
2018
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| Subjects: | |
| Online Access: | http://eprints.unisza.edu.my/6285/1/FH02-FESP-18-15506.pdf http://eprints.unisza.edu.my/6285/ |
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| Institution: | Universiti Sultan Zainal Abidin |
| Language: | ta |
| Summary: | Stock screening process for Sharīʻah compliance refers to a
certain process to select the stocks and shares accordingly and to
make them enlisted as Sharīʻah compliant stocks. Using
discussion and analytical method this article comparatively
discusses several methodologies to screen for Sharīʻah complaint
shares that have been utilized worldwide. Usually two aspects are
important in the screening process, business transactions
screening and financial transactions screening. In the screening
process a specific threshold of Sharīʻah non-compliant elements,
such as illegal income and profit, is overlooked considering the
principles of collective needs, public wellbeing, common plight
and so forth. Generally, a percentage of illegal wealth present is
tolerated - 5% in business screening and 33% in the financial
screening. However, profit arising from these illegal elements
neither shall be distributed among the shareholders nor shall it be
used in any beneficial scheme of the company such as tax
deduction, zakat exemption and the like. The profit amount shall
be disposed for charitable purposes instead. |
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