[Correction: An earlier version of this article suggested that the new ShariahShares would be the first Shariah ETFs in the U.S. The Javelin ETF (NYSE Arca: JVS) launched in June of this year and provides exposure to the global ex-U.S. markets.]

ShariahShares ETF Trust last week applied to register the two Sharia-law-compliant U.S.-traded ETFs.

ShariahShares FTSE USA Fund and the ShariahShares FTSE Developed ex-U.S. Fund will invest in foreign and domestic companies that meet the stringent requirements of Sharia law.

ShariahShares FTSE USA Fund will track the FTSE Shariah USA Index, which comprises 241 mid- and large-cap U.S.-traded shares.

ShariahShares FTSE Developed ex-U.S. Fund will track the FTSE Shariah Developed ex-U.S. Index, a market-cap weighted index which comprises stocks from 25 of the 48 countries in the FTSE GEIS Index Series.

The exchange-traded funds will be permitted to invest 80 percent of their assets in underlying securities, and 20 percent in futures and options contracts

In keeping with Sharia law, the funds will not be allowed to invest in non-Islamic banks, finance, insurance, alcohol, entertainment, or tobacco companies. Moreover, the funds cannot purchase shares in food producers of non-halal or pork products, or weapons manufacturers.

In order to meet the investment criteria of the funds, companies will also have to show debt, cash and interest-bearing items less than 30 percent of total assets, and accounts receivable less than 50 percent of total assets. In addition, they must meet specific revenue and dividend guidelines.

The fund’s adviser is California-based Florentez Investment Management.

Sharia-screened ETFs are popular in Europe.

-- This report was filed by IndexUniverse.com's senior reporter Daniel Harrison.