The vocabulary this site uses, defined once and linked to the evidence. Where scholars genuinely disagree about a term, the entry says so rather than picking a side.
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Established custom, treated as a source of legal weight.
Load-bearing in crypto arguments: whether something counts as property with real value often turns on whether people in fact treat it that way, which is a question about custom rather than about the protocol.
A scholar's formal legal opinion on a question.
Non-binding and specific to the question asked, the reasoning used and the school it comes from. Two fatwas can differ without either being wrong, which is why quoting one in isolation is misleading — this site publishes research and shows the disagreement rather than issuing rulings.
Islamic jurisprudence — the human effort to derive rulings from the sources.
Distinguished from sharia itself: fiqh is the reasoning, and reasoning can differ between qualified scholars. Most 'is X halal' disagreements are fiqh disagreements about how an old category applies to a new instrument.
Permitted under Islamic law.
Applied to an investment it is a conclusion about a specific thing — this company, this contract, this token — not a blanket property of an asset class. Two shares on the same exchange can differ, which is why screening happens per issuer rather than per market.
Forbidden under Islamic law.
In screening this usually follows from one of two things: what the business does, or how it is financed. A company can be ruled out by its activity alone regardless of how clean its balance sheet is.
Independent legal reasoning applied to a question the sources do not settle directly.
The mechanism by which classical categories reach modern instruments. Nothing in the sources mentions a perpetual swap or a token, so every ruling on one is an act of ijtihad — which is why they vary.
Doubtful — neither clearly permitted nor clearly forbidden.
The honest category for cases the evidence does not settle. This site keeps it separate from a failure: 'we could not establish this' is a statement about us, and 'this does not pass' is a statement about the company. Collapsing them would overstate what has been measured.
Excessive uncertainty about what is actually being exchanged.
Not price risk. A share can fall 40% without gharar being involved, because what was bought was clear at the time of sale. Gharar bites when the subject of the contract itself is unknown — an undisclosed supply, a quantity that can change after purchase, an exit controlled by someone else.
Hoarding a necessity to force its price up.
Distinguished from ordinary inventory: the objection is to withholding something people need in order to profit from the shortage, not to holding stock in the normal course of trade.
Gambling — a gain funded by another party's loss, decided by chance.
The precise objection is about the SOURCE of a return, not its size or volatility. Where no business earned anything and no asset was used, one holder's profit has to come from another holder's loss, and that is the structure the prohibition names.
Bidding up a price with no intention to buy.
The classical name for what modern markets call ramping or wash trading. It is a prohibition about market conduct rather than about the asset, and it applies to a permissible instrument traded dishonestly.
Unlawful increase — most familiarly, interest.
The prohibition is on the increase itself, not on profit. A return earned by taking real commercial risk is permitted; a return guaranteed on a loan regardless of outcome is not. This is why the screens measure interest-bearing debt and interest income rather than profitability.
Riba arising from unequal exchange of the same counter-value.
Trading like for like in unequal quantity, such as gold for gold. It is the reason currency exchange has its own rules (sarf) and the reason same-sitting delivery matters in some crypto arguments.
Riba arising from deferral — the classical interest-on-a-loan case.
An increase charged for time. This is the form that makes a conventional bond, a margin loan and a savings account problematic, and the reason a company's interest income is screened as well as its debt.
A gift, given without consideration.
Relevant where a return is described as a voluntary gift rather than a contracted increase — a characterisation scholars examine carefully, because a 'gift' that is expected every time is a return by another name.
A lease — the sale of an asset's usufruct rather than the asset.
Payment is for use over time, which is permitted, as distinct from payment for the passage of time itself, which is not. The basis of most Islamic leasing and of many sukuk structures.
A commission to manufacture something not yet built.
Permits payment and delivery arrangements that salam does not, because the subject is made to order. Widely used for construction and project finance.
A reward offered for performing a specified task.
Payment is contingent on the result rather than on effort, which makes it the category sometimes invoked for mining and for protocol rewards paid for verifiable work.
A partnership of capital and effort, sharing profit by agreement and loss by capital.
One party funds, the other manages. Profit is split on agreed ratios; financial loss falls on the capital provider, and the manager loses their effort. The shape most often cited as the Islamic alternative to an interest-bearing deposit.
A cost-plus sale at a disclosed markup.
The seller buys the asset, owns it, then sells it on at a stated profit. The markup is permitted because it is the price of a real sale rather than the price of time — the distinction that separates it from a loan.
A joint venture where all partners contribute capital and share profit and loss.
Closest in structure to equity ownership, which is part of why shares in a permissible business are the least contested asset class in Islamic finance.
A forward sale where the price is paid in full now and goods are delivered later.
The permitted mirror image of a conventional forward. One side is fully settled at the outset, which is precisely what an ordinary futures contract does not do — both sides deferred is the shape classical fiqh rules out by near-consensus.
Currency exchange.
Governed by its own rule: both legs delivered in the same sitting, with no deferral on either side. This is why spot FX is treated differently from a rolling position that pays or receives overnight interest.
A unilateral promise.
Binding on one party only, which lets structures achieve some of what a bilateral forward would without both sides being deferred. Its use in modern products is itself debated.
The minimum wealth at which zakat becomes due.
Benchmarked to gold or silver, so it moves with their price. Below it, no zakat is owed.
Giving away the portion of a return traceable to impermissible income.
The practical answer to a company that passes its screens while earning a small amount of interest: the corresponding share of the dividend is calculated and given away rather than kept. It is why the non-permissible income ratio is published as a figure rather than only as a pass or fail.
Voluntary charity, as distinct from obligatory zakat.
The usual destination for purified income, given without expecting benefit or reputational return.
The obligatory annual charge on qualifying wealth.
Owed on wealth held above a threshold for a lunar year, at a rate that depends on the asset. It is a duty on the holder rather than a screen on the investment, and it applies to permissible holdings.
The Accounting and Auditing Organisation for Islamic Financial Institutions, and the screening standard it publishes.
Its equity screen tests debt and investments against MARKET CAPITALISATION rather than total assets, which is why a company's status can change with its share price even when nothing in its accounts moved. This site computes it from filings rather than taking it from a vendor.
The test of what a company actually does, applied before any ratio.
A company whose core business sits in an excluded sector — conventional finance, alcohol, gambling, tobacco, pork, weapons, adult entertainment — does not pass regardless of how clean its balance sheet is. Ratios cannot rescue an activity failure, and this ordering is not negotiable.
Interest-bearing debt measured against the standard's denominator.
The most commonly cited screen, usually with a threshold near a third. What differs between standards is almost never the idea and almost always the denominator — market cap, an averaged market cap, or total assets.
An index family whose screen uses a trailing 24-month average market capitalisation as the denominator.
Averaging the denominator makes a verdict less sensitive to a single day's price, which is a deliberate design choice rather than an approximation — and a reason two standards can disagree about the same company on the same day.
An index screen using total assets as the denominator, with its own thresholds.
Close to MSCI in construction and different in its cut-offs, which is enough to produce genuine disagreements on companies near a boundary.
A recorded state meaning no verdict could be established.
Deliberately not a failure. 'We asked and there is nothing' and 'we could not reach the source' are facts about us, while a FAIL is a fact about the company. This site keeps the three apart everywhere they appear.
An index screen testing ratios against total assets rather than market capitalisation.
Because the denominator is an accounting figure rather than a market one, its verdicts move when the accounts are restated rather than when the share price moves. The M-series variant uses an averaged market cap instead.
Revenue traceable to impermissible sources, as a share of total revenue.
Typically capped around five per cent. A company under the cap is not treated as clean: the corresponding share of a return is purified. This site publishes the figure itself so the purification amount can be computed rather than guessed.
An index screen using a trailing 36-month average market capitalisation.
The longest averaging window of the standards screened here, and therefore the slowest to react to a price move in either direction.
A screen associated with Sheikh Taqi Usmani, tested against total assets and including a non-liquid assets test.
The non-liquid assets requirement does work that other standards assign to a receivables ratio, which is why this site publishes no receivables row for AAOIFI — the test is not missing, it lives elsewhere.
A fund traded like a share.
Screened by looking through to what it holds rather than at the wrapper. A fund is permissible to the extent its holdings are, which is why this site screens fund holdings individually rather than accepting a label.
Screening a fund by its underlying holdings rather than its name.
The only defensible way to rate a fund: the wrapper carries no compliance information of its own. Where holdings are not disclosed, the honest output is that the fund cannot be rated, not that it passes.
Borrowing to increase position size.
The loan almost always carries interest, so the objection is usually riba rather than anything about the underlying instrument — a permissible share bought on margin fails on the financing.
A derivative with no expiry, held in line with spot by periodic funding payments.
Both sides are deferred and the funding rate is a payment for holding a position over time, which is the shape that draws both the gharar and the riba objections at once.
Selling an asset that is not owned, intending to buy it back lower.
Problematic on the straightforward ground that it is the sale of something the seller does not own, and usually involves a borrowing fee as well.
Buying an asset outright for immediate settlement.
The least contested way to hold almost anything permissible, because both legs complete and nothing is deferred or borrowed.
A token designed to hold a fixed value against a currency.
The screening question is what backs it and whether holders receive a return. A fully-reserved token that pays nothing is treated very differently from one whose reserves earn interest that reaches holders.
Committing tokens to help secure a network, in return for a reward.
Assessed on what the reward is actually paid for. Compensation for verifiable work or service has a recognised shape (ju'alah, ijarah); a yield that accrues simply for holding a balance is examined much more sceptically.
A certificate representing ownership in an asset or venture, often described as an Islamic bond.
The description is imprecise and the imprecision matters: a bond is a debt paying interest, while a sukuk should convey ownership and its returns should follow the underlying asset's performance. Structures that replicate a bond's economics without the ownership are contested.
See also: The seven standards, side by side · Where the standards disagree · Screened companies, with their ratios · Longer guides · Definitions are this site's own, written to be checkable against the pages they link to. Open research, not a fatwa.