Academic & Shariah Governance

Quantitative Screening & Editorial Methodology

EthicVestor operates on strict principles of academic independence, theological rigor, and mathematical transparency. All calculations, algorithmic screeners, and research briefings produced by our analysts reference established standards from global Islamic financial institutions.

1. The Four Foundational Theological References

Our research frameworks are anchored in rulings from the world's most authoritative Shariah standards organizations:

AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions): Specifically Shariah Standard No. 21 (Financial Papers/Equities), Standard No. 35 (Zakat), Standard No. 57 (Gold), and Standard No. 59 (Sale of Debt).
The International Islamic Fiqh Academy of the OIC (Jeddah): Resolutions on modern partnership contracts, stock markets, and financial rights.
Dow Jones Islamic Market Index (DJIM) Supervisory Board: Standard screening protocols used by S&P Dow Jones Indices.
FTSE Shariah Index Advisory Committee: Asset-based screening criteria applied to global mid and large-cap equities.

2. Two-Tier Equity Screening Protocol

Stage A: Qualitative Sector Screening (Haram Revenue Prohibition)

Any enterprise that derives its core business from non-permissible economic activities is immediately excluded:

Conventional Banking, Lending, and Insurance (Riba-based finance).
Alcohol, Brewing, and Distribution.
Tobacco, Nicotine, and Vaping products.
Adult Entertainment, Pornography, and Exploitative Media.
Gambling, Casinos, Betting, and Lottery services.
Pork products, Non-Halal Meat Processing, and related byproducts.
Weapons manufacturing and controversial military armaments.

Stage B: Quantitative Financial Ratio Screening (AAOIFI Standard 21)

Financial Ratio	Maximum Threshold	Rationale
Non-Permissible Incidental Income	< 5.0% of Gross Revenue	Tolerates unavoidable minor banking interest, subject to mandatory purification.
Total Interest-Bearing Debt	< 30.0% of Market Capitalization	Prevents investing in over-leveraged debt vehicles.
Cash & Interest-Bearing Securities	< 30.0% of Market Capitalization	Ensures tangible business operations dominate cash instruments.
Accounts Receivable / Total Assets	< 67.0% of Total Assets	Prevents discounted debt trading (Bai' al-Dayn).

3. Dividend Purification Formula

When a screened corporation passes Stage A and Stage B but earns minor non-operating interest income (under 5%), investors must purify the dividend yield:

        Purified Sum = Dividend Paid × (Impure Interest Income / Total Corporate Revenue)
      

4. Editorial Independence & Commercial Disclosure

EthicVestor maintains a strict separation between research content and commercial monetization. Platform reviews and evaluations are never influenced by affiliate partnerships. When partner links are included, they are explicitly tagged in accordance with FTC guidelines.