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As part of its aggressive drive to grow the Islamic mutual fund industry, Indonesia’s Financial Services Authority (OJK) is making it mandatory for investment managers to carve out a dedicated Shariah unit, a rule which could be implemented as early as 2017. VINEETA TAN however finds out that market observers may not be as enthusiastic about OJK’s latest move.

“This would be a difficult task because unlike their banking counterparts, investment management firms do not have the economies of scale to commit resources for a separate unit,” Farouk Alwyni, the president director and CEO of consulting firm Alwyni International Capital, tells IFN.