JSX okays syariah investments

The Jakarta Post, Jakarta

The National Syariah Council signed on Thursday a memorandum of understanding (MOU) with the Jakarta Stock Exchange (JSX) to pave the way for the development of syariah-based investment portfolios in the country.

Under the agreement, the council would make sure the syariah portfolios like bonds and stocks are in compliance with syariah (Islamic law) principles, said JSX president Erry Firmansyah.

The council also signed the same MOU with the Surabaya Stock Exchange and other related market regulatory organizations.

"Companies which will issue syariah investment products are required to submit their terms and conditions to the council for approval," said Erry.

Under the plan, the council can also explore other types of syariah-based investment portfolios like state warrants and mutual fund products.

Erry said that with the above agreement, all related market organizations are obliged to accommodate transactions in syariah- based investment products, and they must also provide necessary facilities to facilitate the transaction.

Meanwhile, chairman of the Capital Market Supervisory Agency (Bapepam) Herwidayatmo welcomed the move, saying it would provide new investment alternatives for the people.

He said that syariah-based investment products would soon emerge as an important investment option in the country as most Islamic countries including Malaysia had launched such products.