Glossary
AAOIFI
Definition
Accounting and Auditing Organization for Islamic Financial Institutions — issuer of the global shariah, accounting, and governance standards used across Islamic finance.
Headquartered in Bahrain, AAOIFI publishes over 100 standards. Its Shariah Standards (chaired by Mufti Taqi Usmani) are the de facto reference for Islamic banks, sukuk issuers, and shariah audit firms.
Standards are non-binding internationally but are adopted as law in Bahrain, Oman, Pakistan, Sudan, Syria, and parts of the UAE — and are followed by all major global Islamic banks.
How AAOIFI applies to your trading account
When a broker calls its Islamic account 'AAOIFI-aligned', it means the swap-free structure, contract language, and fee model have been designed against AAOIFI Shariah Standard No. 1 (currency trading) and Standard No. 21 (equity transactions). Overnight interest is removed entirely — not disguised as an administrative fee tied to the interest-rate differential.
For a retail Muslim trader, this is the practical difference between an 'Islamic account' badge and a genuinely halal account. Brokers that reference AAOIFI standards in writing, and expose their Shariah audit, are the safe starting point.