Islamic Fund Management
139
rating agencies, research institutions.
 Research institutions specialising in the field of Islamic finance, for
example, will conduct industry-based research to address
implementation issues when applying Islamic finance in practice.
5. Innovative
products
 Currently, the market is not innovative in terms of product
development. Standard products using the contract of murabahah have
been approved by the CSO and used by all participative banks.
 The market can, however, be innovative in terms of the development of
various types of Shariah-compliant funds, such as waqf funds, equity
funds, i-REITs and SRI Islamic funds, once the infrastructure for Islamic
funds has been established by the authorities.
6. Human capacity  Trained personnel are a necessity for the efficient and effective
implementation of Islamic finance policies. Training is required in the
aspects of Shariah compliance, product development, accounting and
tax, Islamic stock screening approaches, risk management and many
other areas.
 Collaborative efforts are required between market players and
regulators to build up human capacity for the industry.
7. Competition
from
conventional
finance
 While the conventional finance industry is well established, Islamic
finance is a recent initiative. Islamic financial institutions should ensure
high standards of service to broaden their customer bases. Islamic funds
will also be successful if they offer competitive risk-adjusted returns.
Source: ISRA