The study of fatwa DSN-MUI concerning Implementation The Principles of Sharia in Capital Market

ABSTRACT

The dynamic development of sharia capital market needs to be supported by the existence of Bapepam-LK rules and Fatwa DSN, as the basis of both sharia product and activities in capital market. However, in the development of sharia capital market, the activities of sharia capital market frequently resulted in some capital market activities which are not included in Fatwa DSN-MUI and Bapepam-LK rules.

This study aims to identify several points that still required the alignment of perception and synchronization among Fatwa DSN-MUI number 40, other Fatwa DSN-MUI, and capital market regulation, as well as existing practices. Moreover, the result is expected to serve as an input for Bapepam-LK’s decision makers to align the perception between Bapepam-LK’s regulation and Fatwa DSN-MUI related to capital market, as well as to be the basis for coordination between Bapepam-LK and DSN-MUI.

According to the result and discussion with the expert, we conclude that generally regulations in the Fatwa DSN-MUI related to the implementation of sharia principle in capital market have been in conformity with the regulation and activities in capital market. However, there are still several regulations that substantially not in alignment with regulation and activities in capital market, among others are the definition of shares with the privileged right, the application of “sukuk” term as substitution for “Islamic Bonds” term, the existence of sharia supervisory board (DPS) and the parties who understand sharia principles in capital market, and the operational mechanism in sharia investment fund, especially related to the number of Aqad, the cleansing mechanism of non halal asset of sharia investment fund and prohibition of short selling transaction, margin transaction for the stock exchange member offering services or sharia transaction product for the customer.

This study delivers some recommendations i.e. the need for alignment of perception between Bapepam-LK and DSN-MUI in understanding the substance of regulation in capital market and Fatwa DSN-MUI regarding the points mentioned in above. This study also recommends the need for further coordination and discussion in order to harmonize and synchronize between Bapepam-LK and DSN-MUI. Finally, there is also a need of discussion among related Bureaus in Bapepam-LK regarding the regulation of the prohibition of margin and short selling transactions to the stock exchange members offering the services or the sharia transaction products.