How the SC Shariah-Compliant Securities List Is Reviewed
The short answer
The Securities Commission’s Shariah Advisory Council (SAC) classifies securities using a two-tier quantitative approach and updates the list twice a year, in May and November [1]. The list is published on the last Friday of those months [2], and Shariah indices adopt it at the next June or December review [3].
Why look at the review process, not just the status?
Because status can change at a review, the process matters as much as the status itself. Many pages explain what Shariah-compliant means; this one covers the review cycle: who decides, when, and how the result flows into indices. For the basics, see the Shariah-compliant stocks glossary.
What do the key terms mean?
Who decides, and how?
The SAC of the Securities Commission determines the Shariah status of securities [1]. It adopts a two-tier quantitative approach: a single business activity benchmark that assesses the company’s primary business and investment activities, and financial ratio benchmarks that assess its financial position [1].
The SC’s overview does not list the ratio thresholds, so this page does not either. Refer to the SC for the methodology document.
Status is a classification, not an opinion on a company’s quality or price. It tells you whether a security passes the SAC’s screens at the time of the review, and nothing about whether it suits your goals.
When does the list change?
The list is updated twice a year, in May and November [1]. The SC’s calendar of periodic updates places the publication on the last Friday of May and November [2]. The list has been issued since 1997 [1].
Since April 2024, securities of companies seeking to list on the Main, ACE or LEAP Markets are reviewed by the SAC before listing, and the status is posted on the SC website once the listing application is approved [1].
How does the list reach the indices?
The FTSE Bursa Malaysia ground rules state that the SAC announces Shariah-compliant companies semi-annually on the last Friday of May and November, and these form the basis of the EMAS Shariah, Small Cap Shariah and MidS Cap Shariah indices, implemented after the close on the third Friday of June and December [3].
The gap between release and implementation is worth noting. A change announced in May reaches these indices only after the close on the third Friday of June [3], so for a few weeks the list and the index can differ.
A separate index, the Hijrah Shariah Index, uses both the Yasaar screening methodology and the SAC’s, and takes the largest 30 EMAS companies that qualify [3].
How do the list and the indices compare?
| Item | SC / SAC list | FTSE Bursa Malaysia EMAS Shariah Index | Hijrah Shariah Index |
|---|---|---|---|
| Who sets status | SAC [1] | Uses the SAC’s screening [3] | Uses both Yasaar and SAC screening [3] |
| Cycle | May and November [1] | Implemented in June and December [3] | Implemented in June and December [3] |
| Scope | Listed securities assessed by the SAC [1] | EMAS constituents that are Shariah-compliant [3] | Largest 30 qualifying EMAS companies [3] |
What does this mean for investors?
A company’s status can change at a review. A stock that was compliant may move off the list, or a new one may be added. The usual reasons relate to the business activities and financial position that the SAC assesses [1], so review dates are good moments to re-check holdings.
Hypothetical illustration: suppose Investor A holds Company A, which is on the list at one review. At the next review the SAC’s assessment of its business activities or financial position leads to a different classification. Investor A’s dated notes show when the status changed and whether an index or fund that follows the list has yet implemented the change.
Because the list takes effect at set dates, status is not a daily signal. An index reflecting a change does so only at its next implementation date [3].
Also keep in mind that the SAC list applies to securities as classified by the SC. Other bodies and funds can use different screens, as the Yasaar example shows [3].
How can you re-check your holdings?
- Note the SC publication dates each year: the last Friday of May and November [2].
- After each release, compare your holdings with the new list.
- If an index or fund you follow is Shariah-screened, allow for its implementation date in June or December [3].
- Keep a dated note of what changed and why, so that you are working from evidence rather than memory.
Who is this useful for?
- Investors who follow a Shariah mandate and want to know when to re-verify.
- Fund or portfolio reviewers matching holdings to a Shariah benchmark.
- Newcomers wondering why a stock’s label changed.
Finworld’s Shariah stock filter and the Shariah investors page show how to filter end-of-day data by Shariah status. Always confirm status against the SC’s published list and calendar [2], which are the authority, rather than a third-party copy that may be out of date.
Frequently asked questions
Who decides which securities are Shariah-compliant?
The Securities Commission’s Shariah Advisory Council determines the status [1].
How often is the SC list updated?
Twice a year, in May and November [1]; the calendar says the last Friday of those months [2].
Are new listings reviewed?
Since April 2024, companies seeking to list on the Main, ACE or LEAP Markets are reviewed by the SAC before listing [1].
When do Shariah indices adopt the new list?
Changes are implemented after the close on the third Friday of June and December [3].
Sources
- Securities Commission Malaysia — Shariah-Compliant Securities (SAC two-tier approach, twice-yearly update, pre-listing review)
- Securities Commission Malaysia — Calendar of Periodic Updates (list published every last Friday of May and November)
- FTSE Russell (LSEG) — FTSE Bursa Malaysia Index Series Ground Rules, v6.1, March 2025 (index definitions, eligibility, semi-annual review)
Disclaimer: Finworld provides market education and research tools only. This is not investment advice. Market data is end-of-day.