Islamic Fund Management
40
3. COMPREHENSIVE ANALYSIS OF ISLAMIC FUND MANAGEMENT:
INFRASTRUCTURE DEVELOPMENT, INVESTMENT AND
COMMERCIAL CONSIDERATIONS
3.1 Development of Infrastructure of the Islamic Funds Ecosystem
Building the basic pillars to support the development of the Islamic fund management industry
is key to ensuring sustainable organic growth summarises these key pillars.
Figure 3.1: Building Blocks to Sustain the Long-Term Growth of Islamic Fund Management
Source: RAM
Pillar 1 – Legal, Regulatory, Supervision and Shariah Frameworks
The establishment of a robust regulatory framework and continuous market supervision
engender trust in the markets and allow greater transparency in product development,
approval processes and governance while ensuring the protection of investors’ interests. The
governing rules and regulations issued by a country’s securities commission set the tone on
the conduct of AMCs (or fund managers), and facilitate the orderly development of the Islamic
fund management industry. Since licences are issued by the authorities, misconduct or
provision of false information to the public will result in the revocation/suspension of licences
and/or imposition of fines.