Shariah-compliant investing in Malaysia: how to check a stock, fund or scheme yourself

The short answer. In Malaysia you do not have to take anyone’s word that an investment is Shariah-compliant. For shares listed on Bursa Malaysia, the Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) publishes the official list twice a year, in May and November. A company is on it only if less than 5% of its income comes from non-compliant activities, if both its conventional cash and its interest-bearing debt are below 33% of its total assets, and if it also passes a qualitative review. In the November 2025 list, 859 of 1,073 listed securities (80%) were Shariah-compliant (SC, 28 Nov 2025). For a fund, check that it is offered as an Islamic fund and names a Shariah adviser registered with the SC. This page explains how to check each case. It does not tell you what to buy.

Who decides that an investment is Shariah-compliant

Three different bodies give Shariah rulings on investments in Malaysia. Which one applies depends on what you are looking at.

• The SC’s Shariah Advisory Council. The SAC is “the authority responsible for determining the application of shariah principles to ICM [Islamic capital market] businesses and transactions” (The Star, 1 Jul 2026). It was set up on 16 May 1996 under the Securities Commission Act 1993. Its current seven members serve from 1 July 2026 to 30 June 2029. It decides which listed securities are Shariah-compliant and publishes its resolutions (SC, SAC resolutions).
• The fund’s own Shariah adviser. Every issuer of an Islamic capital market product, including an Islamic fund, must appoint a Shariah adviser. If the issuer appoints individuals rather than a firm, it must appoint at least three, who form a Shariah committee (SC, Guidelines on Islamic Capital Market Products and Services, revised 30 Mar 2026, paras 23.02 and 23.06). The adviser must be registered with the SC and follows the SAC’s rulings.
• The national and state fatwa bodies. The Muzakarah of the National Fatwa Committee (Jawatankuasa Fatwa Majlis Kebangsaan Bagi Hal Ehwal Ugama Islam Malaysia) and the state fatwa councils issue religious rulings. These cover schemes that sit outside the SC’s list, such as ASNB’s fixed-price funds and gold trading.

Islamic banking and takaful come under a fourth body, Bank Negara Malaysia’s own Shariah Advisory Council, set up in May 1997 (BNM). This page does not cover banking or takaful.

How the SC screens a listed company

The SAC uses a “two-tier quantitative approach”: a business activity test and a financial ratio test. It adds a qualitative review on top (SC methodology). A security is Shariah-compliant only if it stays below every benchmark.

Test 1: business activities, now a single 5% benchmark

The SAC adds up the income from Shariah non-compliant activities and compares it with the group’s total income: revenue, other income and share of profit. Total income has been the only denominator since the SAC’s 281st meeting on 11 July 2024 (SC, SAC resolutions).

The income from these activities must be less than 5% of total income:

• conventional banking and lending, and conventional insurance;
• gambling, liquor, pork, and non-halal food and drink, including food without halal certification;
• tobacco, cigarettes and e-cigarettes;
• interest income from conventional accounts and instruments, including late payment and penalty charges;
• dividends from Shariah non-compliant investments;
• Shariah non-compliant entertainment;
• any other activity the SAC deems non-compliant.

Listed food manufacturers must also hold halal certification from JAKIM or a body JAKIM recognises (SC, list of 28 Nov 2025, p. 3).

What changed in 2025. Until recently there was a second, looser benchmark of 20%. It covered share trading, stockbroking, cinemas and rental income from non-compliant tenants. At its 288th meeting (24 February 2025) and its 296th meeting (13 November 2025), the SAC resolved to remove the 20% benchmark and keep a single 5% benchmark. The change applies to listed companies whose financial year ends on or after 31 December 2025 (SC, SAC resolutions). The November 2025 list still applied the 20% benchmark (p. 4). Older guides that still quote “5% and 20%” are out of date.

Test 2: two financial ratios, each below 33%

Ratio	What counts	What is left out	Limit
Cash ÷ total assets	Cash placed in conventional accounts and instruments	Cash in Islamic accounts and instruments	Less than 33%
Debt ÷ total assets	Interest-bearing debt	Islamic financing and sukuk	Less than 33%

The SC says these ratios are “intended to measure riba and riba-based elements” in the company’s balance sheet (SC, list of 28 Nov 2025, p. 4). Sukuk, for reference, are defined by the SC as “certificates of equal value evidencing undivided ownership or investment in the assets using Shariah principles and concepts endorsed by the SAC” (SC guidelines, interpretation).

Test 3: the qualitative review

Even a company that passes both tests can be excluded. The SAC “also takes into account the qualitative aspect which involves public perception or image of the company’s activities from the perspective of Islamic teaching” (SC, list of 28 Nov 2025, p. 5). This is why the numbers alone never settle the question. The tool above shows whether a company’s figures would pass the numerical tests. Only the SC list says whether it is actually compliant.

What the list covers, and how often it changes

• Securities covered. Ordinary shares, and warrants issued by the company itself if the underlying shares are compliant. Loan stocks and bonds are non-compliant unless they are structured on Shariah principles the SAC has approved (SC, list of 28 Nov 2025, p. 5).
• Frequency. The list is released on the last Friday of May and November and takes effect that day. Each review uses the audited accounts published on Bursa Malaysia in the previous six months. The November 2025 list used accounts released between 1 April and 30 September 2025. The next update is expected on 27 November 2026.
• The latest figures we could check.

List	Compliant	Listed	Share	Changes	Source
28 November 2025	859	1,073 (as at 25 Nov 2025)	80%	49 in, 36 out	SC booklet, Table 3
29 May 2026	886 (reported)	“more than 1,000”	not published	44 in, 18 out	The Edge, 29 May 2026

The May 2026 booklet did not appear on the SC’s list page when we checked on 29 October 2026. The May 2026 figures therefore come from the press. By sector, the November 2025 list shows wide gaps: 95% of construction securities were compliant, against 16% in financial services.

• New listings. Since April 2024, companies seeking to list on Bursa Malaysia no longer apply to the SAC for a Shariah classification. The SAC reviews them instead, and the SC publishes their status before listing (SC, Shariah-compliant securities).

How to check a listed stock yourself

1. Open the latest SC list. Go to the SC’s List of Shariah-Compliant Securities page and download the most recent booklet. Look the company up by name or stock code, under the right market (Main, ACE or LEAP) and sector.
2. Check the date. A status is valid from one effective date to the next. A stock that was compliant last year may have been reclassified since. Tables 1 and 2 of each booklet list the securities that have just moved in or out.
3. For an IPO, use the SC’s separate page on the Shariah status of companies seeking listing.
4. Indices are a second check, not a substitute. Bursa Malaysia and FTSE Russell run Shariah versions of the market indices. The FTSE Bursa Malaysia EMAS Shariah Index holds the constituents of the broad FBM EMAS index that are compliant under the SAC methodology. The FTSE Bursa Malaysia Hijrah Shariah Index holds the 30 largest EMAS companies that pass both the SAC screen and an international screen by Yasaar, which uses its own ratios (FTSE Russell ground rules v6.1, March 2025). An index tells you what its rules include. It is not a recommendation, and this page gives no index performance.

How to check a fund yourself

A unit trust fund is Shariah-compliant only if it is set up and run as an Islamic fund. A word like “halal” in a brochure is not enough. Four checks:

1. Read the prospectus or product highlights sheet. It should state that the fund is an Islamic (Shariah-compliant) fund and name its Shariah adviser. Under the SC’s rules, an Islamic unit trust fund’s assets “must only consist of assets that comply with Shariah”. It may use derivatives only for hedging, and only Islamic derivatives unless its Shariah adviser approves otherwise. If it tracks an index, the index must be a Shariah index (SC guidelines, paras 30.01–30.03).
2. Check the Shariah adviser. Search the name in the SC’s List of Registered Shariah Advisers, which was updated in July 2026. The SC also forbids a company from appointing one of its own employees as its Shariah adviser (para 8.04).
3. Read the annual or interim fund report. It must include the Shariah adviser’s report, stating whether the fund “has been operated and managed in compliance with Shariah” during the period. If it has not, the report must say what was done to fix the problem (paras 29.01 and 29.03).
4. Check the seller. Search the agent and the distributor in the FIMM public search. It covers consultants by name, FIMM number or identity card number, and member companies by name and registration type. Then check any unfamiliar name against the SC’s Investor Alert List.

Can non-Muslims invest in a Shariah-compliant fund?

Yes. The SC’s Shariah rules govern what the fund holds and how it is managed, not who may buy its units. We found no condition on the investor’s religion in the SC’s Guidelines on Islamic Capital Market Products and Services. Fund managers in Malaysia sell Islamic funds to both Muslims and non-Muslims. The same goes for Shariah-compliant shares: anyone can buy a stock on the SC list.

Purification: what to do with income that is not clean

The SAC publishes disposal and purification guidance with every list (SC, list of 28 Nov 2025, pp. 5–7). It is addressed to investors who invest on Shariah principles.

• A stock you hold is reclassified as non-compliant. If, on the effective date, the market price is at or above your investment cost, you must dispose of the shares. You may keep dividends received up to the effective date and any capital gain from selling on the effective date. Dividends and excess gains received after that date should go to baitulmal and/or charitable bodies. If the price is below your cost, you may keep holding the shares and keep their dividends until the dividends received plus the market value equal your cost. At that point the SAC advises you to sell. While you hold, you may still subscribe to rights issues, bonus issues and warrants, on condition that you speed up the sale.
• You hold a stock that was never compliant. The SAC advises you to sell it within a month of learning its status. Any capital gain or dividend, received before or after the sale, must go to baitulmal and/or charitable bodies. You may keep only your investment cost, which may include brokerage and other transaction costs.
• Inside an Islamic fund. The same rules apply to the fund. Its Shariah adviser decides where the gains go. If disposing of a non-compliant security causes the fund a loss, the fund management company must make good the loss to the fund.

The SC’s guidance deals with reclassified and non-compliant securities. It does not set a purification rule for dividends from stocks that are on the list. For that question, ask a Shariah scholar or your state religious authority.

Schemes with their own Shariah status

Some schemes are not on the SC list, and each has its own authority. We describe who decides. We do not compare these schemes or give their returns.

• EPF Simpanan Shariah. The Employees Provident Fund’s Shariah savings option, open since 2016. It invests only in Shariah-compliant assets and has no conventional banking exposure. An EPF Shariah Advisory Committee oversees how it is run and invested (Free Malaysia Today / Bernama, 25 Jul 2016). The full history of its dividends and how to opt in are on our page EPF Simpanan Shariah dividend history.
• Lembaga Tabung Haji (TH). The pilgrims fund board is a statutory body under the Tabung Haji Act 1995. Its Shariah matters go to its own Shariah Advisory Committee (Jawatankuasa Penasihat Syariah, JPS) (The Star, 11 Aug 2026). Its oversight is changing. Following a Royal Commission of Inquiry, a task force of the SC, Bank Negara and TH examined placing TH’s investment arm under regulatory oversight. On 4 September 2026 the Prime Minister backed placing TH’s investments under the oversight of the SC or Bank Negara, with amendments to the Act to follow (The Star, 4 Sep 2026). As of 29 October 2026 we found no amendment in force.
• ASNB fixed-price funds (such as ASB and ASN). These funds are managed by Amanah Saham Nasional Berhad, a PNB subsidiary, and regulated by the SC as unit trusts. Their Shariah status comes from a fatwa, not from the SC list:
  • The 80th Muzakarah of the National Fatwa Committee (February 2008) ruled investing in ASN and ASB, and receiving their dividends, harus (permissible). An academic study refers to a later pronouncement in 2012 (Journal of Fatwa Management and Research, 2020).
  • Selangor and Penang at first disagreed. Selangor’s fatwa committee declared the investments permissible on 27 April 2017 (IAIS Malaysia, 23 Jun 2017). In September 2017 PNB said its unit trust schemes had received a harus fatwa from all state religious councils (NST, 13 Sep 2017).
  • A harus ruling says the investment is permissible. It is not the same as a Shariah-compliance classification by the SC’s SAC, and the academic literature records that the ruling rests on public interest (maslahah). PNB itself has acknowledged that “there are still religious scholars who do not agree”. It reported that 76.6% of PNB’s assets under management were in Shariah-compliant instruments by SC parameters in 2021 (Kosmo, 22 Nov 2021). That figure is for PNB as a group, not for a single fund.
  • ASNB also runs funds that are offered as Shariah funds in their own right. For any ASNB fund, check its prospectus or fact sheet.
• Physical gold. Buying and selling gold is governed by the National Fatwa Committee’s Gold Investment Parameters (Parameter Pelaburan Emas), adopted at its 96th Muzakarah on 13–15 October 2011 (Federal Territory Mufti’s Office, Irsyad al-Fatwa no. 753, 10 February 2023). The core rules are those of a valid sale, with immediate exchange: payment and delivery may not be deferred, so no instalments or credit. The committee leaned towards allowing no delay in delivery at all. In 2012 it found that one gold trading company did not fully meet these parameters. Bank Negara’s Shariah Advisory Council also discussed Shariah parameters for gold and silver investment at its 135th meeting on 28 May 2013 (BNM). We describe the rules only. This is not a suggestion to buy gold.

Common traps

• “Halal” marketing with no Shariah adviser. If a product calls itself halal, Islamic or “syariah” but names no Shariah adviser registered with the SC, the label means nothing in law. Ask for the prospectus and the adviser’s name, and check both.
• Unauthorised schemes. Schemes promising fixed profits, gold “investments” with deferred delivery, and online trading platforms that use religious language all appear on the SC’s Investor Alert List. The SC says the list “is not exhaustive”. A name that is not on it is not automatically safe. Some entries are flagged as a “potential clone”, meaning they pose as a legitimate firm.
• Unregistered agents. Check every unit trust or private retirement scheme seller in the FIMM search. FIMM has stopped issuing physical authorisation cards, so a card shown to you proves nothing.
• An out-of-date status. A stock’s status can change every May and November. A list printed in a blog post, or in an older version of this page, may already be wrong.
• Mixing up the authorities. A fatwa ruling a scheme harus, the SC’s list, and a fund’s Shariah adviser’s report are three different things. Check which one actually applies to the product in front of you.

FAQ

How are Shariah-compliant securities screened and approved in Malaysia? The SC’s Shariah Advisory Council screens every security listed on Bursa Malaysia. Income from non-compliant activities must be below 5% of group total income. Conventional cash and interest-bearing debt must each be below 33% of total assets. The SAC also applies a qualitative review. It approves an updated list on the last Friday of May and November, based on the companies’ latest audited accounts.

Can non-Muslim investors invest in Shariah-compliant unit trust funds in Malaysia? Yes. The Shariah rules apply to the fund’s investments and management, not to the investor. We found no religious condition for buying units in the SC’s guidelines, and the funds are sold to Muslims and non-Muslims alike.

How often is the list of Shariah-compliant securities updated? Twice a year, on the last Friday of May and November. The November 2025 list classified 859 of 1,073 listed securities (80%) as compliant. The next update is expected on 27 November 2026.

Is a particular stock or REIT Shariah-compliant, and where is the official answer? For any security listed on Bursa Malaysia, the only official answer is the SC’s List of Shariah-Compliant Securities, approved by its Shariah Advisory Council. Look the security up by name or stock code in the latest booklet, and check its date: the list changes on the last Friday of May and November, and the next update is expected on 27 November 2026. We do not give the status of individual securities on this page, because it can change at each update; a status copied into a blog post or a search result may already be out of date.

Which Shariah unit trust is best? We do not rank or recommend funds, and giving investment advice in Malaysia requires a licence. What you can do yourself is check any fund in four steps: the prospectus must describe it as an Islamic fund, its Shariah adviser must be on the SC’s register, its fund report must contain the adviser’s compliance opinion, and the seller must appear in the FIMM search (see “How to check a fund yourself” above).

What happens if a stock I hold is removed from the list? Under the SAC’s guidance, if the price on the effective date is at or above your cost, you dispose of it. Dividends and gains up to that date are yours, and any later ones go to charity or baitulmal. If the price is below your cost, you may hold until dividends plus market value equal your cost, then sell.

Is a fund that calls itself “halal” automatically Shariah-compliant? No. Check that the prospectus describes it as an Islamic fund, that it names a Shariah adviser registered with the SC, and that its fund report contains the adviser’s compliance opinion. Then check the seller in the FIMM search and the SC Investor Alert List.

Is ASB Shariah-compliant? The National Fatwa Committee (80th Muzakarah, 2008) and, by 2017, all state fatwa councils ruled investing in ASNB’s fixed-price funds harus (permissible). This is a fatwa of permissibility, not an SC Shariah classification, and some scholars still disagree. For a ruling that applies to you, refer to your state’s mufti office.

What we do not cover

• No recommendation. We do not name, rank or compare stocks, funds or schemes, and we give no past or expected returns. In Malaysia, giving investment advice requires a licence under the Capital Markets and Services Act 2007. This page describes the rules and the official tools for checking. It is not advice.
• No banking products. We do not cover Islamic deposits, bank investment accounts or financing, including gold accounts offered by banks.
• No takaful.
• Rulings can change. Each rule above has a date and a source. Before you rely on it, check the current version on sc.com.my, with your fund’s Shariah adviser or with your state religious authority.

Sources checked on 29 October 2026. The SC had not posted its May 2026 booklet on its list page by that date, so the May 2026 figures come from the press. Where this page relies on the press or on academic papers, it says so.