Shariah-Compliant

A label meaning that a qualified Shariah scholar or board has reviewed a product, investment, or business and found it conforms to Islamic law: no interest, no excessive uncertainty or gambling, no prohibited industries, and real assets and risk behind every return. The term is a determination, not a certification by any government; in the United States there is no regulator that defines or polices it, so its meaning depends on who reviewed the product, against which standard (AAOIFI being the most cited), and whether the review is current and public.

'Halal' is the everyday synonym.

Because no U.S. agency defines 'Shariah-compliant,' the phrase is only as strong as the review behind it, and the review has four parts you can check. Who: a named scholar or board with recognized training in fiqh al-muamalat, not an anonymous 'compliance team.' Against what: a stated standard, usually AAOIFI's Shariah Standards for contracts and either AAOIFI, the Dow Jones Islamic Market, MSCI Islamic, or S&P Shariah methodology for stock screening, since the thresholds differ (debt caps of 30% versus 33%, different treatment of cash). How current: a certificate dated within the last year or so, and a mechanism for annual re-review, since companies drift in and out of compliance as their balance sheets change.

How public: a certificate or fatwa you can read, rather than a claim on a landing page. The label also has scope limits worth noticing. A 'Shariah-compliant' stock passes a screen but may still pay some impermissible income that must be purified.

A 'Shariah-compliant' bank account at a conventional bank may be compliant in its own terms while the bank around it earns interest, which most scholars accept for transactional accounts. And a product can be compliant under one board and rejected by another, which is a feature of a system without a central authority, not evidence of fraud. HalalWallet reports what each provider documents under these four headings and does not itself certify anything.