KARACHI: The Securities and Exchange Commission of Pakistan (SECP) announced on Monday that it was relaxing regulations for Sukuk issuance in order to develop the Shariah-compliant market.
In a press release, the regulatory body believed that it would cut the cost of Sukuk issue and provide incentives to investors.
“The SECP is amending the 2015 Issue of Sukuk Regulations to facilitate the issuers, reduce the cost of issue and ease the regulatory burden,” said the regulator.
“The proposed amendments include waiving of mandatory underwriting where the purpose of the issue is to repay existing debts, reducing the minimum number of underwriters from two to one, specifying the fit-and-proper standards for Shariah adviser and essential elements of Shariah pronouncement, disclosing the expenses specific to Shariah compliance and audit, emphasising the issuance of Sukuk using the special purpose vehicle and aligning the definition of Sukuk with that given by the Accounting and Auditing Organisation for Islamic Financial Institutions.”
The SECP has invited public opinion on the proposed amendments before their finalisation.
The SECP has also advised the PSX to come up with proposals for reducing the cost of market-maker for Sukuk issuance, rationalising the minimum size of public offer portion to reduce the cost of issue and organising a seminar with potential issuers to widen awareness.
“These measures shall further facilitate the issuers, reduce their cost and hassle,” the SECP said. “In Pakistan, the Sukuk market has been performing below potential. While the demand is substantial, supply remains short.”
Published in The Express Tribune, April 11th, 2017.