10 · Shariah Negative Screen Policy
Two screens: (A) Applicants for funding (business activity) and (B) Corpus investments (activity + financial ratios). Rejection under a screen is absolute — no committee vote can override it. Pending SSB confirmation (doc 09 Q25–26).
Part A — Applicant screen (startups seeking Type A / Type B funding)
A1. Prohibited activities — automatic rejection
An applicant is rejected if any material part of its business, revenue or product involves:
| # | Prohibited |
|---|---|
| 1 | Gambling, betting, lotteries, casinos, prediction markets, loot-box mechanics |
| 2 | Dating, adult content, pornography, escort or related services |
| 3 | Alcohol, tobacco/vaping, narcotics, pork — production, sale, distribution, marketing |
| 4 | Riba — interest-based lending/credit, conventional banking, conventional insurance, interest-bearing products |
| 5 | Weapons and munitions; military targeting systems |
| 6 | Speculative derivatives, conventional forex/CFD margin trading, and instruments dominated by gharar or maysir |
| 7 | Haram entertainment/content — including music/media contrary to Shariah as determined by the SSB, idolatrous content |
| 8 | Any activity the SSB determines impermissible |
A2. Ancillary / de-minimis
Where a prohibited element is incidental and immaterial (e.g. generic advertising inventory that may occasionally serve a prohibited advertiser), the SIC may refer the case to the SSB, which may permit it subject to conditions and, where relevant, income purification. Prohibited core activity is never curable.
A3. Additional integrity checks
Fraud, deception, exploitation, environmental harm, or activity unlawful in the applicant's jurisdiction → rejection.
A4. Process
- Intake — applicant self-declares against the list; declaration is contractual.
- Screening — the Investment & Donation Manager runs the screen; the jurisprudence member of the SIC verifies.
- Decision — the jurisprudence member holds a halal veto (doc 08 §B5).
- Doubt → referral to the SSB; its determination is final.
- Post-award — if a funded startup pivots into a prohibited activity: funding stops immediately; undrawn tranches cancelled; for Qard Hasan the principal remains repayable; the case is reported to the SSB.
- Record — every screen outcome is minuted and archived.
Part B — Corpus investment screen (the Waqf's own portfolio)
B1. Preferred route
The corpus is invested primarily in instruments that are already Shariah-screened by a licensed manager: sukuk, Islamic/Shariah ETFs and funds with their own Shariah board. This keeps the screening obligation with the licensed, certified product.
B2. If direct equities are held
Apply activity screening (Part A list) plus AAOIFI-style financial ratios — to be confirmed by the SSB (doc 09 Q26), indicatively:
- interest-bearing debt / market cap < 30%;
- interest-bearing deposits & receivables / market cap < 30% (or < 49% for receivables per the applied standard);
- income from non-compliant activities < 5% of total income.
B3. Purification
Any incidental non-compliant income (including bank interest) is quantified and given away to charity — never used for the ecosystem, never counted as yield, never distributed. Method and recipient per the SSB. Purification is reported in the annual Shariah audit.
B4. Prohibited for the corpus
Conventional bonds, interest-bearing deposits as an investment, conventional insurance, margin/short selling, and any instrument with a guaranteed interest return.
Review
This policy is reviewed annually by the SSB and updated on any determination.
A working draft, not an executed document and not legal advice. digiwaqf is pre-launch: not yet a licensed waqf, not Shariah-certified. Nothing here is an offer to sell securities.
