Islamic Fund Management
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3. Grant incentives to market players who opt for Islamic finance
solutions and the establishment of funds via taxation or fiscal
incentives.
Item 2 – Robustness of Capital Market Activities
Key National Measure Merits and Actionable Measures
Development of essential
building blocks to support
the sustainability of ICM
activities
 An integrated plan at the national level is vital to the development of a
domestic ICM.
 The following building blocks constitute the essential pillars for ICM.
Ultimately, the absence of a healthy pipeline of Shariah-compliant
equities and sukuk will limit the ability to create a wide range of Islamic
funds.
1. Legal and regulatory framework.
2. Shariah governance.
3. Tax framework.
4. Market infrastructure.
5. Diversified market players on supply (breadth and depth of
products and services) and demand (broad investor-base) sides.
Formation of specific
working groups/
associations to facilitate
and moderate market
issues
 Different markets operate differently. Some adopt the top-down
approach while others require market forces to drive the development of
guidelines and policies.
 The advent of working groups comprising fund managers, regulators and
institutional investors will fuel market progression. However, it is
important to identify the commercial interests of members upfront, to
ensure the group’s collective efforts will benefit the industry and not its
specific interests or gain.
Item 3 – Creating a Captive Demand Base for Islamic Funds
Key National Measure Merits and Actionable Measures
Creation of market demand
for Islamic funds will
provide the necessary
investor base
 Alignment of wealth creation via Shariah investments or ethical investing
for government and corporate pension schemes will provide a solid base
in building the Islamic fund management industry.
 Level of financial inclusion varies across different jurisdictions. The
ability to penetrate retail investors with a solid value proposition will go
a long way towards supporting the long-term growth of Islamic funds.
 Ultimately, the growth of a country’s GDP per capita will have spill-over
effects. As a person’s income improves, so will his/her allocation when
setting aside money for savings.
Item 4 – Awareness and Capacity Building
Key National Measure Merits and Actionable Measures
Awareness and technical
understanding define the
success story of any fund
management industry
 Development of market awareness will provide the coverage required to
support financial planning. This can be achieved through collaboration
between regulators and market players via promotional activities,
conferences, and seminars for public education.
 Penetration using digital interface should also be considered since
mobile penetration is considered the fastest-growing tool in reaching out
to the masses, irrespective of geographical location.
Sources: RAM, ISRA