Dual Legal Framework in Islamic Capital Markets

Abstract

The main feature of traditional financial system is that it considers economic aspects of the transaction only. This system supports the economic development and not the welfare of humankind. However, except for the Islamic financial system, no other financial system stood in front of it as a viable alternative system. Malaysian Islamic financial system has made tremendous progress in creating sound Islamic Financial system. However, the historical aspect of this country which has passed through Islamic and traditional financial system has its own advantages and disadvantages. Despite having mix and heterogeneous culture, it succeeds in creating Islamic Financial System based on dual legal system to satisfy the needs of multi-cultural factors. Due to adoption of dual legal system, several legal issues have arisen. This chapter sheds light on some matters related with the adoption of dual legal system. The chapter is conceptual in nature and the method adopted is the intensive survey of literature, thereby all the information has been gathered from the secondary sources.