Sukuk issue: SECP to notify regulations soon

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) will notify regulations for the issuance of sukuk shortly in order to develop the capital market and facilitate fund-raising through Shariah-compliant financial products. The Sukuk Regulations 2015 are being issued under Section 506A of the 1984 Companies Ordinance. The draft regulations were earlier notified to solicit public comments. Currently, sukuk is 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 the structuring and issuance of sukuk. “It becomes imperative to have a separate regulatory framework for sukuk,” said an SECP official. Major investors in sukuk include mutual funds, employees’ funds, commercial banks, both conventional and Islamic, and non-banking finance institutions, which directly or indirectly hold public funds. The regulations require appointment of a Shariah adviser and an investment agent.

Published in The Express Tribune, January 30^th, 2015.

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