FAQ #6: Does index screening consider contract methods like sukuk, musharakah, mudarabah, etc.?

For indices, they don’t look into the contract per se but the business sector of the company as well as how its finances are being conducted.

Example: we know that interest bearing compliance ratio accounts for interest-based debt securities.

So if a company was engaged on sukuk ijara as an alternative to interest-based securities, sukuk ijarah accounts will not fall under interest bearing compliance ratio but liquidity compliance ratio.

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