Earlier yesterday, the Securities and Exchange Commission of Pakistan (SECP) approved the regulations for issuance of sukuk for the development of Islamic capital market and for facilitating fund-raising through Shariah-compliant financial products.
The Sukuk Regulations-2015 have been made under Section 506(a) of the Companies Ordinance, 1984. The draft regulations were earlier notified for seeking public comments.
Islamic capital market is considered as an important segment of a developed and broad-based capital market. A developed Islamic capital market can play a vital role in the economic growth of a country.
Currently, sukuk are issued as an instrument of redeemable capital under Section 120 of the ordinance, mainly through private placements.
Besides Section 120, no other specific regulatory framework exists for structuring and issuing sukuk. The SECP has decided to have a separate set of regulatory framework for issuance of sukuk.
Major investors in sukuk include the mutual funds, employees’ funds, commercial banks — both conventional and Islamic — and non-banking finance institutions (NBFCs), which directly or indirectly hold public funds.
The regulations prescribe certain conditions to be met before issuance of sukuk and the eligibility criteria for the issuers.
