Shariah’s Black Box

In all of its public disclosures and representations, Dow Jones informs the public that the DJII Shariah Supervisory Board “was established to counsel Dow Jones Indexes on matters relating to the Shariahh [sic] compliance of the indexes’ eligible components.”[356] One question that comes to mind is why the DJII needs any Shariah authority on retainer if the “filters” are “quantitative rules” applied presumably by a software program? Assuming Muslim investors might not trust the DJII to maintain the “filters” and some supervision is required to keep everyone honest, why does the DJII keep six world-renowned Shariah authorities on retainer? The answer suggested by the questions themselves is that there is still some component of Shariah supervision of the DJII that is not simply “quantitative”.[357] If this is indeed the case, this fact is disclosed nowhere by the DJII or by any publicly reporting fund that licenses the DJII and is required to disclose the filters the fund has licensed.

Yet, it is possible that the answer is simpler than that. Perhaps, the DJII, seeking to be the “gold standard” in the industry, maintains an illustrious board to gild its reputation among Shariah-adherent investors. Indeed, the Shariah supervisory board members are listed prominently on all of the DJII promotional literature, a veritable who’s who in the Shariah authority world:[358]

Name Country
Shaykh Abdul Sattar Abu Ghuddah Syria
Shaykh Justice Muhammad Taqi Usmani Pakistan
Shaykh Nizam Yaquby Bahrain
Shaykh Dr. Mohamed A. Elgari Saudi Arabia
Shaykh Yusuf Talal DeLorenzo United States
Shaykh Dr. Mohd Daud Baker Malaysia






On the DJII Internet site, the short resumes of each Shariah authority follows. The disclosures relating to Usmani are limited to his professional and legal associations:

Mr. Usmani has been a member of the Supreme Court of Pakistan since 1982. He is also the vice president of Darul Uloom Karachi and the vice chair and deputy chairman of the Islamic Fiqh Academy (OIC), Jeddah. Mr. Usmani edits the monthly magazines Albalagh and Albalagh International. He is a chairman or member of the Shariahh supervisory boards of a dozen Islamic banks and financial institutions worldwide.

About David Yerushalmi

Mr. Yerushalmi is a lawyer specializing in litigation and risk analysis, especially as it relates to geo-strategic policy, national security, international business relations, securities law, disclosure and due diligence requirements for domestic and international concerns. David Yerushalmi has been involved in international legal and constitutional matters for over 25 years. David Yerushalmi is today considered an expert on Islamic law and its intersection with Islamic terrorism and national security. In this capacity, he has published widely on the subject including the principle critical scholarship on Shariah-compliant finance published in the Utah Law Review (2008, Issue 3). This work and the empirical investigation known as the Mapping Shariah project in America was the focus of a recent monograph published by the McCormack Foundation and the Center for Security Policy.