Dawn News

Comments sought on Sukuk draft rules

ISLAMABAD, Oct 4: The Securities and Exchange Commission of Pakistan (SECP) has sought public opinion on its proposed Sukuk Regulations-2012 which are aimed at promoting the Sukuk (Islamic bond) market.

The regulations are facilitate issuers and provide comfort to Sukuk investors. Comments by the public can be submitted by Oct 15. The regulations cover all aspects related to Sukuk bonds, including eligibility and conditions for issuance of Sukuk, disclosure and reporting requirements and appointment of trustee and Shariah advisor.

“There is a strong demand for Islamic investment product from non-traditional investors who are mainly businessmen, like jewellers and traders,” said an official of the SECP.

These regulations have to be followed by companies or corporate body for issuing Sukuk bonds.

However, such a company or corporate body issuing the Sukuk should not have any over-due loan, the issuers as well as instrument rating shall not be lower than triple B minus (BBB-).

The regulations also highlight that the issuer has to appoint a trustee through a trust deed to safeguard interests of the Sukuk holders, it has arranged appropriate security, where required, in the form acceptable to the trustee.

The issuer has to obtain consent of a depository company to declare the Sukuk as an eligible security for depository system.

Every company or corporate body shall before the issuance of Sukuk, appoint a Shariah advisor who shall ascertain and shall give a Fatwa that the concept on the basis of which the Sukuk is structured and the business in which proceeds of the Sukuk issue are to be utilised are not against principles of Shariah.

The draft highlights that Sukuk are issued to the general public, the issuer shall prepare a prospectus containing all information and disclosures as required under the ordinance.

However, where the Sukuk are issued through private placement, the issuer shall prepare an information memorandum and disclose all material information, including those as mentioned in the Sukuk regulations.


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