KEEL

Every stock passes through three tests. Failing any one makes it uncomfortable from a halal perspective.

We first evaluate whether the business itself is halal. Companies whose core operations are categorically non-compliant fail immediately. For diversified businesses that generate some revenue from haram sources, we apply a strict 2.5% threshold across four consecutive quarters, and we use our internal attribution methodology to handle platforms that mix halal and haram offerings under a single revenue line.

Our 2.5% threshold is stricter than the 5% standard used by most halal screens, including those built on AAOIFI guidance. The choice is deliberate. The 2.5% figure mirrors the rate of zakat, which is Shariah’s own textual standard for the purification of wealth. Aligning our haram-revenue threshold with the zakat rate grounds the number in classical jurisprudence rather than in a discretionary tolerance level. The 5% alternative has no equivalent anchor in the Quran or Sunnah; it was chosen by contemporary standard-setters as a matter of convention. That does not make it wrong, but it does make it less objective.

We measure how central interest is to the company’s financial structure. A company fails this test when its interest income or interest expense crosses the same 2.5% threshold we apply to haram revenue, tested across four consecutive quarters. Pre-revenue and early-stage companies that have not yet reached their normal operating stage are not tested here until their business is mature enough to evaluate fairly.

We check for current, material ties to regimes engaged in human rights violations and for other systemic ethical failures such as forced labor, major unresolved corruption, or deceptive practices at scale. Past issues that have been resolved or divested do not count against the company. Only ongoing concerns matter.

A company passing all three tests is rated comfortable. A company failing any one is rated uncomfortable. When analysis is complete but genuinely ambiguous, we default to comfortable, following the Islamic principle that the default state of things is permissibility (al-asl fi al-ashya al-ibaha). When required data is unavailable, the rating is unclear.