Regulatory Alerts2024-01-01
Shari’ah Compliant Securities Screening Methodology
The Securities and Exchange Commission of Sri Lanka has adopted a unique two-tier screening methodology for Shari’ah-compliant securities to standardize whitelist publishing across the local capital market. The framework mandates qualitative business activity assessments alongside quantitative financial ratio benchmarks, including limits on impermissible income, interest-bearing borrowings, and illiquid assets. Additionally, the directive requires bi-annual whitelist publications and dividend purification advice endorsed by SEC-accredited scholars, with the methodology subject to revision every three years.
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