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Operationalising Maqasid al-Shariah in Equity Screening: A Critical Legal Analysis of DSN-MUI Compliance Mechanisms on the IDX

Istianah Zainal Asyiqin

Published
December 29, 2023

Vol. 19 No. 3 (2023): Vol 19 No 3 (2023)
Pages 287-306

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Abstract

Stock investment and trading are often perceived as speculative and akin to gambling, particularly among laypeople, thus considered religiously prohibited. This article aims to dispel these misconceptions by examining Sharia-compliant stock investments on the Indonesia Stock Exchange (IDX) through the lens of Islamic economic law. Using a normative juridical method with statutory and conceptual approaches, this study examines regulatory documents, DSN-MUI fatwas, capital market regulations, and relevant legal literature. The findings show that the main legal issue in Sharia-compliant stock investment is no longer limited to its permissibility, as this has been recognized through DSN-MUI fatwas and capital market regulations. The more substantive issue lies in how Sharia compliance is maintained continuously after stocks are listed and traded on the IDX. This study finds that continuous Sharia compliance depends on transparent screening, periodic supervision, coordination among DSN-MUI, OJK, and IDX, and adequate investor protection when the Sharia status of a stock changes. Therefore, this article contributes to the discussion by shifting the focus from normative permissibility to the effectiveness of legal and institutional mechanisms in ensuring Sharia compliance in Indonesia’s capital market.

Keywords

Indonesia Stock Exchange; Islamic Economic Law; Sharia Capital Market; Sharia-Compliant Stocks; Stock Investment

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Publication Information
Published December 29, 2023
Section Articles
Copyright Copyright (c) 2023 Varia Justicia
Keywords
  • Indonesia Stock Exchange
  • Islamic Economic Law
  • Sharia Capital Market
  • Sharia-Compliant Stocks
  • Stock Investment