The Sharia (literally ‘the way of life’) is a complete set of principles and rules regulating the life of Muslims from cradle to grave, including investments and commerce.

The Sharia is partly codified in the Quran (a revealed text) and the Sunna (the ‘tradition’ or the recorded saying and actions of the Prophet of Islam) and partly elaborated by Islamic scholars through a process of Ijtihad (‘interpretative effort’) and Qias (‘analogy’).

The Sharia is therefore an evolving body and permits Muslims to adapt the practice of the religion to the time and place they live. Most investments fall between that which is permitted (Halal) and that which is prohibited (Haram).

There are clear general principles regarding what is prohibited, for example interest (riba), excessive uncertainty (gharar) and prohibited assets including alcohol and tobacco.

Where an Islamic individual or institution is unsure whether an investment is Sharia compliant they will seek the advice of their preferred scholar or board of scholars.