The legal status of Sharia’s governance and it’s authority in capital market

Abstract

A Part of activities in the capital market includes transactions in framework of legal regulations. The other part consists supervision rules and principles that be implemented by laws. Along with conventional legal instruments, one of the most important issues that should be considered within Sharia-based systems is the Sharia’s governance and sharia’s based rules and regulations. Despite of using and generality of the subject as a simple context in three areas of guidance, monitoring and competition, this important factor is not institutionalized in the current capital markets structure and it faces some challenges. On one hand, these challenges are related to both legal ambiguities and organizational problems. Therefore, to realize a favorable legal system based on religious regulations, it is need to consider institutions of the Sharia’s governance as guidance and supervisory pillars in the capital market. Because, the most important thing to draw a structure for based sharia markets is accordance of regulations and rules based on sharia standards. However, some of the criteria in the capital markets are not compatible with this feature because of the organizational affiliation.

Keywords

• sharia’s governance
• capital market
• religious supervision
• religious standards
• sharia’s advisory council