AAOIFI’s Sharia’a Standards

I’ve been looking for this document for a while.  I don’t know if I just missed it in  my previous searches or if it only came up recently but I’m glad I found it.  You can download it from here:


AAOIFI is the Accounting and Auditing Organization for Islamic Financial Institutions.

I was specifically interested in looking at their standards for investing in Sharia’a compliant stocks.  While there are a number of slightly different (but overall very similar)  rule books to follow for Sharia’a compliance (Dow Jones,  FTSE, MSCI, S&B and AAOIFI being the standard ones), AAOIFI is often considered the gold standard, with the most conservative methods of determining Sharia’a compliance.

I just wanted to know the specific details.

It’s a huge document (over 1200 pages).  The paper that discusses stocks and bonds starts on page 560.

Aim Low (but higher than where you are)

It seems like unquestionably good advice to tell people to aim high. Reach for the stars so that if you miss, you’ll still hit the moon, they say.

But advice like this can be debilitating. You look at the stars and the rickety old bicycle you’re on and you see this is ridiculous. Why bother? It’s a perfectly reasonable conclusion given the circumstances.

If instead, you aimed for that next hill to see what more you could see from that vantage point, the whole thing seems more doable and worthwhile. And who knows, you might come across something or someone that can take you a little bit further. And then from that, get a little further. And so on.

You might even hit the moon some day. Or even the stars.

It all begins by just aiming for that next little hill over there.

How do you buy a home without interest?

This is the first in a series of videos I’m planning to make about the diminishing partnership (musharakah mutanaqisah) model for interest-free home buying.

The 3 minute video illustrates the basic concept of how it works.

In the video, orange rectangles represent rent, blue represents the home buyer’s share of the house and green represents the investor / partner’s share.