What is the difference between pure, mixed and non-compliant stocks?
The labels people search for, and how they map to the screening result.
Short answer
A pure stock belongs to a company with a permissible business and no interest-bearing element in its funding or income; a mixed stock has a permissible business but small interest-bearing debt, deposits or income within the limits, so purification is needed; a non-compliant stock has a prohibited business or breaches the limits. A compliant result in our screen covers both pure and mixed, because it means the ratios are under the limits, not that they are zero.
The three labels
- Pure: a permissible business, no interest-bearing borrowing, no interest-bearing deposits and no income from prohibited sources. No purification needed.
- Mixed: a permissible business with minor interest dealings inside the limits the board accepts. Most boards allow it on condition of purification.
- Non-compliant: a prohibited core business, or interest-bearing debt or cash above the limit. Boards reject it whatever the other numbers say.
Where our screening result fits
Our result has three states: compliant, not compliant and screening incomplete. Not compliant matches the third label. Compliant means the company cleared the checks we ran, and it may be pure or mixed.
We never call a stock pure, because that requires knowing its non-compliant income is zero, and we measure the interest line or estimate an upper bound for it, which does not prove that every impermissible element is absent. So for purification, treat every compliant stock as mixed: purify with the ratio shown on its page, or with what its statements show.
Lists of pure and mixed stocks
Some local Sharia bodies publish lists that split stocks into pure and mixed, based on a line-by-line reading of the financial statements. These lists are useful if you follow the body that issues them, and their results can differ from ours because the criteria and dates differ.
Related questions
Is a mixed stock haram?
Most boards accept it on two conditions: the ratios stay within the limits, and the shareholder purifies the part matching non-compliant income. Some scholars do not accept it at all, so the decision is yours and your scholars'.
Why don't you publish a list of pure stocks only?
Because identifying pure stocks requires proof that impermissible income is zero, and what we measure is the interest line or an upper bound for it. A pure list without that proof would be a claim we cannot back up.
Can a stock move from one label to another?
Yes. A new loan, a large deposit or a sharp fall in the share price can move a stock from compliant to not compliant, which is why every result carries its data date.
Pages that complete the answer (5)
Our Sharia screening is an automated reading of published criteria, not a fatwa.