The Legal Construction of Sharia Capital Market in Indonesia

Capital market is one of the characteristics of developed countries, but its activities in Indonesia experience ups and downs. The Islamization of financial institutions in Indonesia was responded by the country’s capital market in 1997. Islamic capital market has developed following Islamic banking and Islamic insurance industry. The importance of asset management and liquidity management in these two industries raises the need for sharia-based funding sources and investment products, which encourages the development of sharia capital market activities. The beginning of sharia capital operations was the sale of Indosat shares using sharia system in 2012. Law number 8 of 1995 concerning capital market does not explain the dual system in the Indonesian capital market. The legal vacuum that regulates capital market activities has led to an MOU signed in 2003 between BAPEPAM and National Sharia Board-Indonesian Ulema Council (DSN-MUI), an institution established to provide solutions and fatwas on economic development and sharia financial institutions in Indonesia. This step is a good momentum for the development of the legal framework of the Indonesian capital market because several DSN-MUI fatwas have been absorbed into the financial services authority regulations issued by the OJK. This normative research uses a legal approach (statute approach). The researchers conclude that regulations regarding Islamic capital market since its operations in the Indonesian capital market have developed. But higher norms that govern Islamic capital market are needed so that the existence of the Islamic capital market in Indonesia can be maintained, and justice and legal certainty for Islamic capital market players can be achieved. Keywords: Capital market, Islamic capital market, DSN-MUI fatwas DOI: 10.7176/JLPG/82-0