The Innovation Contract Effect on Sharia Capital Market Instruments in The Lens of Sharia Compliance Principles

Abstract

This study aims to analyze contract innovation in Islamic capital market instruments and examine the role of religiosity in shaping perceptions of Sharia compliance. The research employs a qualitative library research approach through the analysis of academic literature, DSN-MUI fatwas, Islamic finance regulations, and scholarly discussions related to Islamic financial innovation and investor religiosity. The findings reveal that contract innovation in the Islamic capital market tends to prioritize formal legal compliance over substantive Sharia values such as justice, transparency, and public welfare. Furthermore, the literature suggests that religiosity may influence investor perceptions, as highly religious investors tend to critically assess whether Islamic financial products genuinely reflect Islamic ethical principles. This study highlights the importance of strengthening substantive Sharia compliance and integrating maqāṣid al-sharī‘ah values into the development of innovative Islamic capital market instruments.