Sharia Supervisory Board
Sharia Board Rulings — Shares
The Sharia controls for investing in company shares, how continued compliance is monitored, and the purification and divestment procedures.
Sharia Board Rulings — Shares
Screening criteria
Investing in the shares of trading companies
Adopted by the Board, with purification mandatory.
- The company's constitution must not name dealing in interest, or in prohibited goods, among its objects.
- Total interest-bearing borrowing — short or long term — must stay below 30% of the market value of the company's shares.
- Total interest-bearing deposits — short, medium or long term — must stay below 30% of that market value; depositing at interest is prohibited whatever the amount.
- Income from a prohibited element must not exceed 5% of total revenue, whether it arises from a prohibited activity or from holding a prohibited asset. Where revenue is not disclosed, a cautious estimate is made.
What this document covers
Monitoring, purification and divestment
- Deferred murabaha may finance a share purchase once the bank owns the shares, provided the company meets the screening criteria; this does not extend to shares offered at incorporation or in a capital increase.
- Shares of Islamic banks may be traded at a mutually agreed price once part of the bank's capital has become tangible assets and usufructs, on the principle of subordination.
- Continued compliance is monitored against the Islamic index of the Damascus Securities Exchange, with prior approval for each new investment and an annual study fixing the purification ratio.
- Purification is calculated per share at each set of final accounts, whether or not a dividend was paid, and the amount is credited to the charity account and may not be used.
- A holding that breaches a criterion must be divested immediately; the capital gain on the share belongs to the bank, but operating income that breaches Sharia must be purified.
Original document
The text above is a transcription of the official document, published so it can be read, searched and translated on any device. The signed PDF below remains the authoritative copy.