Underneath every Malaysian Islamic fund, ETF and Shariah stock portfolio sits one document: the list of Shariah-compliant securities maintained by the Shariah Advisory Council (SAC) of the Securities Commission Malaysia. Fund Product Highlights Sheets cite it as their investable universe, index providers reference the same screened logic, and when a stock drops off it, published mechanics govern what everyone holding it must do. Understanding this list is understanding how Malaysian halal investing actually works. Here is the explainer, grounded in how the framework appears across the provider disclosures we verified on August 6 and 7, 2026.
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Who the SAC is and why its list rules
The SAC is the Securities Commission's Shariah authority for the Malaysian capital market. Its role gives Malaysia something most markets lack: a single, official, regulator-backed answer to the question is this stock halal, rather than competing private opinions. When Public Mutual's PHS says the fund invests in securities on the SAC's list, or when a robo describes its screening universe, they are delegating the compliance question to this national process. The practical consequence for investors is enormous: you do not need to screen Bursa-listed companies yourself, and different products screened against the list are compliant by the same standard rather than by each marketer's private one.
How the screening works
The SAC's methodology examines two dimensions. Business activity: companies whose core business is non-compliant, conventional banking and insurance, gambling, liquor, non-halal food production and the like, are excluded, with benchmark tolerances governing companies that have mixed activities, so a predominantly permissible business is not disqualified by an immaterial sideline. Financial ratios: companies carrying excessive conventional debt or interest-bearing balances relative to their size fail the quantitative screens regardless of what they sell. A company must clear both dimensions to be classified compliant. The methodology's published benchmarks are what make the system predictable: analysts can anticipate borderline cases, and companies themselves manage their financing to retain compliant status, which quietly pushes the whole market's practices in an Islamic direction.
The review cycle and reclassification
The list is not static: the SAC reviews and republishes periodically, and each publication reclassifies some companies in both directions. Reclassification out of compliance is where the published mechanics matter most. The framework, restated in fund documents like Public Mutual's PHS, sets out divestment rules for holders: broadly, positions are to be disposed of under the published conditions, and gains attributable to the period after reclassification are channelled to charity rather than kept. Funds execute this automatically; direct stockholders are their own compliance department, which is one of the honest arguments for using funds and ETFs. Our purification guide covers the cleansing side in detail.
What the list does not cover
Knowing the boundaries prevents expensive assumptions. The list classifies securities, not products: an investment scheme, a savings plan or a structured product is not made halal by containing some listed names, which is why funds appoint their own Shariah advisers on top of the list. It covers the Malaysian market: foreign stocks follow other screeners (Dow Jones Islamic Market and MSCI Islamic methodologies govern the international Eq8 ETF and robo holdings). And notably, the most widely held Malaysian investment scheme sits outside it: ASNB's fixed-price funds are not classified Shariah-compliant by the SAC, a fact at the centre of a genuine fatwa disagreement we treat honestly in our ASB guide.
How each kind of investor should use it
Fund and robo investors: you use it indirectly; your job is verifying the product cites SAC screening and names a Shariah adviser, per our verification checklist. ETF investors: the index methodology plus the fund's adviser do the same job; the Eq8 funds document both. Direct stock investors: check every holding against the current list before buying, recheck at each republication, and act on reclassifications under the published rules, including the charity treatment of post-reclassification gains. Set a reminder for the SAC's publication dates; the investors who get caught are the ones who checked once and assumed forever. Our halal stocks hub helps with the ongoing tracking.
The list's quiet effect on Malaysian companies
One underappreciated consequence: the list disciplines issuers, not just investors. Compliant status widens a company's shareholder base to include every Islamic fund, EPF's Shariah portfolio and screened index products, so losing it has a real cost in demand for the stock. Boards know this, and the financial-ratio screens in particular give finance directors a concrete reason to prefer sukuk and Islamic financing over conventional debt when the balance sheet approaches the benchmarks. Multiply that across the exchange and the screening framework functions as a standing incentive for the corporate sector to keep itself investable by Islamic money, which is part of why Malaysia's capital market has the depth of Islamic instruments it does. Investors reading the list are looking at a scoreboard that the players themselves are actively managing toward.
Why this system is genuinely world-leading
Most markets leave Shariah screening to private index firms and fund houses, with methodologies that differ enough to give the same company different verdicts. Malaysia's regulator-anchored single list, integrated into fund regulation, disclosure documents and divestment rules, is the most complete national infrastructure for retail halal investing anywhere. It is not infallible, methodologies involve judgment calls and tolerances that stricter scholars debate, and the ASB case shows the national process itself can sit in tension with state fatwa authorities. But as a working system that lets an ordinary Malaysian build a verifiably screened portfolio in an afternoon, it has no real rival, which is much of why our complete investing guide can be as practical as it is.
Frequently asked questions
Where do I find the current SC Shariah-compliant list?
The Securities Commission Malaysia publishes the SAC's list of Shariah-compliant securities on sc.com.my, updated at its periodic reviews. Always use the latest publication rather than cached copies.
What happens to my shares if a company is reclassified non-compliant?
The published framework sets divestment rules; broadly, holders dispose under the stated conditions and gains from after the reclassification date go to charity. Funds handle this automatically for their holders.
Does being on the list mean a company is completely free of non-compliant income?
No; the methodology tolerates immaterial mixed activities within published benchmarks. Careful direct investors purify their proportional share of incidental non-compliant income; funds handle cleansing at portfolio level.
Do foreign stocks appear on the SAC list?
The list covers Malaysian-market securities. International halal exposure relies on screeners like Dow Jones Islamic Market and MSCI Islamic, which is what the international Eq8 ETF and robo portfolios use.
Is ASB on the SC Shariah-compliant list?
ASNB's fixed-price funds are not classified Shariah-compliant by the SC's SAC, which is one documented element in the wider fatwa disagreement over ASB. Our dedicated ASB guide presents the positions on all sides with dates and sources.
Compare providers in your state
See side-by-side comparisons of Shariah-compliant products, or let our matcher recommend the best options for your situation.
Do all Islamic funds in Malaysia use the SAC list the same way?
Malaysian-equity Islamic funds cite the list as their investable universe; funds with international mandates layer other screeners on top for foreign holdings, and every fund adds its own Shariah adviser for operations-level compliance. Read the PHS to see exactly which combination governs your fund; our verification guide makes it a ten-minute job.