Implementation of the Prudential Principle (Al-Ihtiyathi) on Investment Manager Regulations in Managing Sharia Mutual Funds in Indonesia

DOI

10.2991/assehr.k.210531.091How to use a DOI?

Keywords

prudential principle (al-ihtiyathi), sharia mutual fund, investment manager

Abstract

Sharia mutual fund investment carries risks so that the investment manager in carrying out the task of managing investor funds in addition to maximizing returns is also obliged to ensure that the benefits received by the customer are truly in line with sharia rules. The implementation of investment transactions in sharia mutual funds must be carried out according to the prudential principle (al-ihtiyathi) based on the rules set out in Fatwa No. 20/DSN-MUI/IV/2001 about Investment Implementation Guidelines for Sharia Mutual Funds. Whereas in POJK No. 24/POJK.04/2014 about Guidelines for Implementation of Investment Manager Functions, it is stated that the application of prudential principles is carried out by taking into account investment risks and the clear division of authority in determining the no. of transactions. Then mentioned in POJK No. 61/POJK.04/2016 about the Application of Sharia Principles in the Capital Market to Investment Managers that the application of sharia principles is carried out in two ways, the establishment of sharia investment managers and sharia investment management units. The application of this prudential principle is not explicitly explained in the regulation so that it contains an element of uncertainty related to being in force of prudential principles in the application of sharia principles. This research is a normative juridical analysis of how the prudential principle implemented in sharia mutual fund investment managers. Based on the results of the research that the application of the prudential principle (al-ihtiyathi) must be applied to start from the institutions, management methods, and services including sharia compliance obligations and laws.

Copyright

© 2021, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Aang Anzal Muhammad Gofar
AU  - Gemala Dewi
PY  - 2021
DA  - 2021/06/29
TI  - Implementation of the Prudential Principle (Al-Ihtiyathi) on Investment Manager Regulations in Managing Sharia Mutual Funds in Indonesia
BT  - Proceedings of the Asia-Pacific Research in Social Sciences and Humanities Universitas Indonesia Conference (APRISH 2019)
PB  - Atlantis Press
SP  - 727
EP  - 733
SN  - 2352-5398
UR  - https://doi.org/10.2991/assehr.k.210531.091
DO  - 10.2991/assehr.k.210531.091
ID  - Gofar2021
ER  -