Pakistani regulator approves standardized Shariah framework for sukuk issuance

The Securities & Exchange Commission of Pakistan (SECP) has greenlit an initiative aimed at standardizing the Shariah structure for the issuance of sukuk, a form of Islamic financial instrument.

The decision, approved by the Shariah Advisory Committee (SAC) of the SECP, brings clarity and consistency to the sukuk landscape. 

The standardized framework, centered around the concept of Musharakah (Shirkat ul Aqd), encompasses a suite of comprehensive draft agreements, encompassing sukuk issuance and subscription, issue agency agreements, and Musharakah arrangements. It also aims to simplify the process of seeking approval for the issuance of Shariah-compliant securities, adhering to the Shariah Governance Regulations of 2018.

Fueling interest in sukuk Issuance

Companies are increasingly expressing interest in utilizing sukuk as a means to address their short-term working capital needs and fund their financial requirements. The framework introduces a level of clarity and predictability, allowing companies to navigate the sukuk issuance process efficiently.