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Proposed Approaches for the Development of Sound Ṣukūk Markets

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Raising Capital on Ṣukūk Markets

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Abstract

This chapter will set out six approaches for the creation and operation of a sound ṣukūk market. Together, they form a development framework that can be applied to all ṣukūk markets. This suggests that the industry stakeholders have the option of adopting the proposed remedies or developing other approaches, following the development framework proposed in this chapter.

Having highlighted several structural, legal, and regulatory hurdles that ṣukūk market expansion encounters at both national and international levels, the necessity to deal with such hurdles and recommend best ṣukūk practice cannot be overstated. The remedies proposed in this chapter aim to ensure that the different problems and challenges facing ṣukūk are overcome at an early stage. However, the task of proposing sound practices for ṣukūk is complicated by the fact that ṣukūk markets differ from one jurisdiction to another in terms of the current level of development.

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Notes

  1. 1.

    M Bakar, ‘Shari’ah Approaches to Product Development and Product Enhancement in Islamic Banking and Finance: An Appraisal’ in Bakar M and Ali E (eds), Essential Readings in Islamic Finance (CERT Publications 2008) 126.

  2. 2.

    Ibid.

  3. 3.

    For more discussion on the difference between these methods, see S Al-Suwailem, Hedging in Islamic Finance (Islamic Development Bank 2006) 104–109; Z Iqbal and A Mirakhor, An Introduction to Islamic Finance (2 edn, John Wiley & Sons 2011) 250–251; H Ahmad, Products Development in Islamic Finance (Edinburgh University Press 2011) 209–212.

  4. 4.

    AAOIFI, ‘AAOIFI Shari’ah Resolutions: Issues on Sukuk’ (AAOIFI, February 2008) 2. http://www.kantakji.com/media/7760/f173.pdf. Accessed 6 October 2014.

  5. 5.

    C Nethercott, H Rai and L Irvine, ‘Sukuk: Rethinking Sukuk While Leaping Forward’ in Edbiz Consulting (ed), Global Islamic Finance Report 2014 (Edbiz Consulting Publication 2014) 130.

  6. 6.

    Ibid.

  7. 7.

    Ibid.

  8. 8.

    Ibid.

  9. 9.

    Ibid.

  10. 10.

    Ibid.

  11. 11.

    Ibid.

  12. 12.

    P Casey, ‘Emerging Issues From Inadequate Disclosure Requirements for Islamic Capital Market Products’ in IFSB, IOSCO and SC (eds), Disclosure Requirements for Islamic Capital Market Products (IFSB, IOSCO, SC 2013) 36.

  13. 13.

    C Nethercott, H Rai and L Irvine, ‘Sukuk: Rethinking Sukuk While Leaping Forward’ in Consulting E (ed), Global Islamic Finance Report 2014 (Edbiz Consulting Publication 2014).

  14. 14.

    See R Haneef, ‘From Asset-Backed to Asset-Light Structures: The Intricate History of Sukuk’ (2009) 1 ISRA International Journal of Islamic Finance 103.

  15. 15.

    For more discussion on the legality of such assets to underlay ṣukūk, see E Ali, ‘Issues in Islamic Debt Securitisation’ in Bakar M and Ali E (eds), Essential Readings in Islamic Finance (CERT Publications 2008) 466–474.

  16. 16.

    See M Al-Sheaibi, ‘Derivatives and Sukuk in the Islamic Capital Market’ in A Thomas (ed), Sukuk (Sweet & Maxwell Asia 2009).

  17. 17.

    P Casey, supra note 12, 38–39.

  18. 18.

    See Todd Schmid, ‘The Real Shariah Risk: Why The United States Cannot Afford To Miss The Islamic Finance Moment’ (2013) 3 University of Illinois Law Review 1293.

  19. 19.

    See Yusuf DeLorenzo, ‘Shari’ah Compliance Risk’ (2007) 7 Chicago Journal of International Law 397.

  20. 20.

    IFSB, ‘Guiding Principles on Liquidity Risk Management for Institutions Offering Islamic Financial Services [Excluding Islamic Insurance (Takāful) Institutions And Islamic Collective Investment Schemes]’ (IFSB, March 2012) 5. http://www.ifsb.org/standard/eng_IFSB-12%20Guiding%20Principles%20on%20Liquidity%20Risk%20Mgmt%20_(March2012).pdf. Accessed 23 January 2015, IFSB, ‘Guiding Principles of Risk Management for Institutions (Other Than Insurance Institutions) Offering Only Islamic Financial Services’ (IFSB, December 2005) 26. http://www.ifsb.org/standard/ifsb1.pdf. Accessed 9 April 2015.

  21. 21.

    IFSB, ‘Guiding Principles of Risk Management for Institutions (Other Than Insurance Institutions) Offering Only Islamic Financial Services’ (IFSB, December 2005) 26. http://www.ifsb.org/standard/ifsb1.pdf. Accessed 9 April 2015.

  22. 22.

    A Lahsasna, Sharīʿah Non-Compliance Risk Management and Legal Documentation in Islamic Finance (Wiley 2014) 17.

  23. 23.

    Ibid. 7.

  24. 24.

    [2009] EWHC 3545 (Ch).

  25. 25.

    Ibid.

  26. 26.

    Ibid.

  27. 27.

    Norton Rose, ‘The Implications for the Islamic Finance Market of The Investment Dar Company KSCC v Blom Developments Bank Sal [2009] EWHC 3545 (Ch)’ (Norton Rose, March 2010). http://www.nortonrosefulbright.com/knowledge/publications/27334/the-implications-for-the-islamic-finance-market-of-the-investment-dar-company-kscc-v-blom-developments-bank-sa. Accessed 5 August 2015.

  28. 28.

    J Ercanbrack, The Transformation of Islamic Law in Global Financial Markets (Cambridge University Press 2015) 233.

  29. 29.

    Kuwaiti Court of Cassation, petition no 1895,1932,1933,1937/2011, judgment dated 19 June 2012.

  30. 30.

    Ibid.

  31. 31.

    Ibid.

  32. 32.

    Ibid.

  33. 33.

    Ibid.

  34. 34.

    Ibid.

  35. 35.

    Ibid.

  36. 36.

    P Saba and F Fathnezhad, ‘Implications of the Kuwait TID V. Blom Judgment on Wakala Contracts’ (Al Tamimi & Co., 2013). http://www.tamimi.com/en/magazine/law-update/section-5/january-2/implications-of-the-kuwait-tid-v-blom-judgment-on-wakala-contracts.html. Accessed 30 September 2015.

  37. 37.

    [2004] EWCA Civ 19. For more discussion, see Chapter 1.

  38. 38.

    [2017] EWHC 2340 Comm.

  39. 39.

    See generally D Dey and Others, ‘Dana Gas Sukuk: A red Herring or Cause for Concern’ (White & Case, 2017). https://www.whitecase.com/publications/alert/dana-gas-sukuk-red-herring-or-cause-concern. Accessed 4 January 2019.

  40. 40.

    For more information: see Offering Circular of Dana Gas Sukuk Limited (2007).

  41. 41.

    Ibid. 25.

  42. 42.

    Islamic Finance News, ‘Dana Gaz Defaults on Sukuk’ (Islamic Finance News, 2012). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019.

  43. 43.

    Islamic Finance News, ‘Dana Gas in Agreement with Sukukholders’ (Islamic Finance News, 2012). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019.

  44. 44.

    Islamic Finance News, ‘Dana Gas Proposes New Sukuk Plan’ (Islamic Finance News, 2012). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019.

  45. 45.

    Islamic Finance News, ‘Dana Gas Good to Go’ (Islamic Finance News, 2013). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019.

  46. 46.

    Islamic Finance News, ‘Dana Gas Completes Restructuring’ (Islamic Finance News, 2013). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019. For more information: see Offering Circular of Dana Gas Sukuk Limited (2013).

  47. 47.

    Islamic Finance News, ‘Dana Gas Renegotiates with Sukukholders’ (Islamic Finance News, 2017). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019.

  48. 48.

    Islamic Finance News, ‘Dana Gas to Replace Unlawful Sukuk’ (Islamic Finance News, 2017). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019.

  49. 49.

    Ibid.

  50. 50.

    Islamic Finance News, ‘Dana Gas Rejects Deutsches’s Sukuk Payment Request’ (Islamic Finance News, 2017). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019.

  51. 51.

    Islamic Finance News, ‘Dana Gas Withdraws Swap Offer’ (Islamic Finance News, 2017). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019.

  52. 52.

    Ibid.

  53. 53.

    Ibid.

  54. 54.

    Islamic Finance News, ‘Dana Gas Says No to Sukukholders Proposal’ (Islamic Finance News, 2017). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019.

  55. 55.

    [2017] EWHC 2340 Comm.

  56. 56.

    Dana Gas PJSC v Dana Gas Sukuk Limited and Others [2017] EWHC 2928 Comm.

  57. 57.

    Islamic Finance News, ‘UK High Court declares Purchase Undertaking Enforceable’ (Islamic Finance News, 2017). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019.

  58. 58.

    Dana Gas PJSC v Dana Gas Sukuk Limited and Others [2018] EWHC 278 Comm.

  59. 59.

    Ibid.

  60. 60.

    Dana Gas PJSC v. Dana Gas Sukuk Limited and Others [2018] EWHC 277 Comm.

  61. 61.

    Islamic Finance News, ‘Dana Gas Receives Orders From Sharjah Court’ (Islamic Finance News, 2018). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019.

  62. 62.

    Islamic Finance News, ‘Court Restricts Dana Gas From Paying Dividends’ (Islamic Finance News, 2018). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019.

  63. 63.

    Islamic Finance News, ‘Dana Gas Reaches Agreement’ (Islamic Finance News, 2018). https://www.islamicfinancenews.com/the-dana-gas-case-timeline. Accessed 4 January 2019.

  64. 64.

    For more discussion on this case, see D Ogali, ‘Lady Justice Cannot Hear Your Prayers’ (2018) 3 Fordham Law Review 1293; M Hekmatyar and E Parkar ‘An Evaluation of Dana Gas’s Mudarabah Sukuk From Shariah and Legal Perspectives’ (2018) 9 European Journal of Islamic Finance 1.

  65. 65.

    See, for example, M Bin Al-Mundhir, Al-Ijmāʿ (Dār Al-Muslim Lil-Nashr Wa Al-Tawziʿ 2004).

  66. 66.

    M Kamali, Shari’ah Law: An Introduction (Oneworld Publications 2008) 118.

  67. 67.

    See, for example, A Bin Taymiyah, Rafʿ Al-Malām ʿan Al-Aʾimmah Al-Aʿlām (Al-Riʾāsah Al-ʿāmmah Liidārāt Al-Buḥūth Al-ʿilmiyyah Wa-Al-Iftā Wa-Al-Daʿwah Wa-Al-Irshād 1992).

  68. 68.

    M Bakar, ‘The Shari’a Supervisory Board and Issues of Shari’a Rulings and their Harmonisation in Islamic Banking and Finance’ in S Archer and R Abdel Karim (eds), Islamic Finance: Innovation and Growth (Euromoeny and AAOIFI 2002) 83.

  69. 69.

    Ibid.

  70. 70.

    See M Balala, Islamic Finance and Law: Theory and Practice in Globalized World (I.B. Tauris 2015) 8.

  71. 71.

    M Kamali, supra note 66, 110.

  72. 72.

    Ibid. 119.

  73. 73.

    Ibid.

  74. 74.

    Ibid. 60–61.

  75. 75.

    See Y Soualhi, ‘Bridging Islamic Juristic Differences in Contemporary Islamic Finance’ (2012) 26 Arab Law Quarterly 313, 318.

  76. 76.

    Ibid. 326.

  77. 77.

    Ibid. 328.

  78. 78.

    Ibid.

  79. 79.

    Ibid. 330.

  80. 80.

    Ibid. 332.

  81. 81.

    Ibid. 333.

  82. 82.

    Ibid.

  83. 83.

    C Soanes and A Stevenson (eds), Oxford Dictionary of English (Oxford University Press 2006) 369.

  84. 84.

    M Malim, ‘The Future of Sukuk: Islamic Capital Markets’ in R Ali (ed), Sukuk and Islamic Capital Markets (Globe Business Publishing 2011) 169–170.

  85. 85.

    H Yaacob, M Mohammad and E Smolo, International Convention for Islamic Finance: Towards Standardisation (ISRA 2011) 21.

  86. 86.

    Ibid.

  87. 87.

    Ibid.

  88. 88.

    R Ali, ‘An Overview of the Sukuk Market’ in Ali R (ed), Sukuk and Islamic Capital Markets: A Practical Guide (Globe Business Publishing 2011) 9.

  89. 89.

    Ibid. 8.

  90. 90.

    C Soanes and A Stevenson (eds), Oxford Dictionary of English (Oxford University Press 2006) 1723.

  91. 91.

    Ibid.

  92. 92.

    Ibid. 793.

  93. 93.

    H Yaacob, M Mohammad and E Smolo, International Convention for Islamic Finance: Towards Standardisation (ISRA 2011) 20.

  94. 94.

    W Ghoul, ‘The Standardization Debate in Islamic Finance: A Case Study’ (8 International Conference on Islamic Economics and Finance, Doha, December 2011) 4.

  95. 95.

    There are other institutions that have work relevant to ṣukūk sector such as the WB, IMF, IDB, and IRTI. However, the nature of their work is different from IIFA, AAOIFI, IFSB and IIFM. The focus here is on work that offers guidance and rules for ṣukūk sector rather than general discussion and debate about the IFSI.

  96. 96.

    These are: resolution no 22 (10/3), entitled ‘Muqaradha Bonds and Development and Investments Certificates’; resolution no 110 (4/12), entitled ‘Lease Ending with Ownership and Leasing Bonds’; resolution no 156 (5/17), entitled ‘mushārakah ṣukūk’. See IIFA, Resolutions and Recommendations of the Council of Islamic Fiqh Academy (1 edn, IDB 2000) 35, 253. See also IIFA, ‘Qarār Raqam 156 (5/17) Bishaʾan Astikmāl- Ṣukūk Al-Mushārakat: Mukawināt Mawjūdātihā’ (IIFA, undated). http://www.fiqhacademy.org.sa/qrarat/17-5.htm. Accessed 8 July 2015.

  97. 97.

    IIFA, Resolutions and Recommendations of the Council of Islamic Fiqh Academy, supra note 96, 55.

  98. 98.

    Ibid. 119.

  99. 99.

    Ibid. 234.

  100. 100.

    IIFA, ‘Resolution no 137 (3/15) concerning Ijārah Ṣukūk’ (Fiqhacademy, 2004). http://www.fiqhacademy.org.sa/qrarat/15-3.htm. Accessed 3 March 2015.

  101. 101.

    IIFA, ‘Al-Qarārāt Wa Al-Tawṣiyāt: Al-Dawrah Al-Tāsiʿah ʿashrah’ (Fiqhacademy, 2009). http://www.fiqhacademy.org.sa/. Accessed 7 November 2014.

  102. 102.

    IIFA, ‘Resolution of OIC Fiqh Academy (related to Islamic Economic and Finance)’ (2014) 22 Islamic Economic Studies 265.

  103. 103.

    IIFA, ‘Al-Qarārāt Wa Al-Tawṣiyāt: Al-Dawrah Al-Wāḥidah Wālʿishrīn’ (fiqhacademy, 2013). http://www.fiqhacademy.org.sa/. Accessed 3 March 2015.

  104. 104.

    AAOIFI, Shari’a Standards for Islamic Financial Institutions (AAOIFI 2010) 303–323.

  105. 105.

    AAOIFI, supra note 4.

  106. 106.

    IFSB, ‘Capital Adequacy Standard for Institutions (other than Insurance Institutions) Offering Only Islamic Financial Services (IIFS)’ (IFSB, December 2005). http://www.ifsb.org/standard/ifsb2.pdf. Accessed 4 March 2015.

  107. 107.

    IFSB, ‘Capital Adequacy Requirements for Ṣukūk, Securitisations and Real Estate investment’ (IFSB, January 2009). http://www.ifsb.org/standard/eng_%20IFSB-7%20Capital%20Adequacy%20Requirements%20for%20Sukuk,%20Securitasations%20and%20Real%20Estate%20investment%20(Jan2009).pdf. Accessed 4 March 2015.

  108. 108.

    IFSB, ‘Revised Capital Adequacy Standard for Institutions Offering Islamic Financial Services (Excluding Islamic Insurance (Takaful) Institutions and Islamic Collective Investment Schemes)’ (IFSB, December 2013). http://www.ifsb.org/standard/2014-01-28_eng_IFSB15%20Revised%20Capital%20Adequacy_(Jan%202014).pdf. Accessed 4 March 2015.

  109. 109.

    IFSB, ‘Revised Guidance on Key Elements in the Supervisory Review Process of Institutions Offering Islamic Financial Services (Excluding Islamic Insurance (Takaful) Institutions and Islamic Collective Investment Schemes)’ (IFSB, March 2014). http://www.ifsb.org/standard/IFSB-16%20Revised%20Supervisory%20Review%20Process_March%202014%20(final-clean).pdf. Accessed 4 March 2014.

  110. 110.

    IIFM, ‘IIFM Sukuk Analysis (as of December 2009)’ (IIFM, December 2009). http://www.iifm.net/documents/iifm-sukuk-analysis-december-2009. Accessed 4 March 2015.

  111. 111.

    IIFM, ‘IIFM Ṣukūk Report 1st Edition’ (IIFM, 2010). http://www.iifm.net/documents/iifm-sukuk-report-1st-edition. Accessed 4 March 2015.

  112. 112.

    IIFM, ‘IIFM Study on Indonesian Sukuk Market & Global Sukuk Issuances’ (IIFM, August 2010). http://www.iifm.net/documents/iifm-study-indonesian-sukuk-market-global-sukuk-issuances. Accessed 4 March 2015.

  113. 113.

    IIFM, ‘IIFM Ṣukūk Report 2nd Edition: A Comprehensive Study of the Global Sukuk Market’ (IIFM, 2011). http://www.iifm.net/documents/iifm-sukuk-report-2nd-edition-comprehensive-study-global-sukuk-market. Accessed 4 March 2015.

  114. 114.

    IIFM, ‘IIFM Ṣukūk Report 3rd Edition: A Comprehensive Study of the Global Sukuk Market’ (IIFM, April 2013). http://www.iifm.net/documents/iifm-sukuk-report. Accessed 4 March 2015.

  115. 115.

    IIFM, ‘IIFM Ṣukūk Report 4th Edition: A Comprehensive Study of the Global Sukuk Market’ (IIFM, November 2014). http://www.iifm.net/documents/iifm-sukuk-report-4th-edition. Accessed 4 March 2015.

  116. 116.

    AAOIFI, ‘About AAOIFI’ (AAOIFI, undated). http://www.aaoifi.com/en/about-aaoifi/about-aaoifi.html. Accessed 30 September 2015.

  117. 117.

    IOSCO Principles document consists of 38 principles of securities regulation which are grouped into nine categories as follows:

    • Principles Relating to the Regulator

    • Principles for Self-Regulation

    • Principles for the Enforcement of Securities Regulation

    • Principles for Cooperation in Regulation

    • Principles for Issuers

    • Principles for Auditors, Credit Ratings Agencies, and other information service providers

    • Principles for Collective Investment Schemes

    • Principles for Market Intermediaries

    • Principles for Secondary Markets

    These principles are based on three objectives of securities regulation which are (1) protecting investors; (2) ensuring markets fairness, efficiency, and transparency, and (3) reducing systemic risk. See IOSCO, ‘Objectives and Principles of Securities Regulation’ (IOSCO, June 2010). http://www.iosco.org/library/pubdocs/pdf/IOSCOPD323.pdf. Accessed 10 February 2015.

  118. 118.

    The IOSCO Assessment Methodology is designed to provide interpretation for the IOSCO Principles and give guidance for self-assessment or third-party assessment of the implementation of the IOSCO Principles. The IOSCO Assessment Methodology does not alter the IOSCO Principles or introduce new principles. See IOSCO, ‘Methodology for Assessing Implementation of the IOSCO Objectives and Principles of Securities Regulation’ (IOSCO, February 2008). www.iosco.org/library/pubdocs/pdf/IOSCOPD226.pdf. Accessed 10 February 2015.

  119. 119.

    IOSCO, ‘Islamic Capital Market Fact Finding Report’ (IOSCO, July 2004). http://www.iosco.org/library/pubdocs/pdf/IOSCOPD170.pdf. Accessed 10 February 2015.

  120. 120.

    Ibid. 52.

  121. 121.

    Ibid. 50.

  122. 122.

    Ibid. 72.

  123. 123.

    Ibid.

  124. 124.

    Ibid. 74.

  125. 125.

    IOSCO, ‘Analysis of the Application of IOSCO’s Objectives and Principles of Securities Regulation for Islamic Securities Products’ (IOSCO, September 2008). http://www.iosco.org/library/pubdocs/pdf/IOSCOPD280.pdf. Accessed 10 February 2015.

  126. 126.

    Ibid. 4.

  127. 127.

    Ibid.

  128. 128.

    The report has listed the issues in the implementation related to the IOSCO Principles as follows:

    • Principle 1: For the sake of clarity it would be beneficial for securities regulators to have a stated position on their regulatory responsibilities with respect to Islamic securities.

    • Principle 3: Where regulators have responsibility for Shariah compliance, it is important to ensure that they possess the necessary powers and resources to regulate this in accordance with their remit.

    • Principle 4: Regulators should ensure that processes are applied in a consistent, transparent and fair manner. In particular, where the regulator is directly involved in giving rulings on Shariah issues, it should consider disclosing key decisions, and the reasoning behind them.

    • Principle 14: Regulators may wish to consider the relevant disclosure standards for ṣukūk within their jurisdiction.

    • Principle 16: Accounting disclosures should be based on internationally acceptable standards (such as IFRS). Regulators, in considering their accounting requirements, should give due regard to the specific characteristics of Islamic securities. Standard-setting agencies such as the IASB may wish to consider the application of IFRS with regard to Islamic financial instruments with other bodies (such as AAOIFI).

    • Principle 19: Regulators may wish to consider relevant disclosure standards for Islamic funds within their jurisdiction.

    • Principle 21: Where regulators have responsibility for regulating sharia compliance, they may wish to consider establishing criteria to ensure the intermediary has the relevant competencies

    • Principle 22: Regulators should define their regulatory approach to determining the capital adequacy and prudential requirements for Islamic securities.

    • Principle 23: Regulators who are responsible for sharia compliance may wish to require that Islamic financial institutions use sharia-compliant risk management techniques

    • Principle 27: Exchanges which regulate the sharia compliance of a security may wish to tag them with a recognised marker and update this as appropriate.

    • Principle 30: Regulators who are responsible for sharia compliance and/or market practitioners may wish to consider developing alternative mechanisms to Securities Borrowing and Lending which are consistent with sharia principles.

  129. 129.

    The IFSB Working Paper is neither a guiding principle nor an exposure draft prepared by IFSB on the area of Islamic capital market regulation. It is a principle-by-principle gap analysis discussing the core principles provided by Basel Committee on Banking Supervision (BCBS), IOSCO, and International Association of Insurance Supervisors (IAIS) and their applicability to supervision of the various sectors of the IFSI. In the area of Islamic capital market, it has reviewed IOSCO’s work and more particularly it has looked at whether the existing IOSCO’s work is applicable to IFSI; requires adjustments; or new principles are required. See IFSB, ‘Evaluation of Core Principles Relevant to Islamic Finance Regulation’ (IFSB, November 2014). http://www.ifsb.org/docs/WP-02_CPIFR%20%28Nov%202014%29.pdf. Accessed 10 February 2015.

  130. 130.

    Ibid. 95.

  131. 131.

    I MacNeil, An Introduction to the Law on Financial Investment (2 nd edn, Hart Publishing Ltd. 2012) 35.

  132. 132.

    P Latimer, ‘How to Ensure Disclosure of Information in Securities Markets Post-GFC’ (2013) 42 Common Law World Review 111, 136.

  133. 133.

    I MacNeil, supra note 131, 36.

  134. 134.

    See L Al-Rimawi, Raising Capital on Arab Equity Markets: Legal and Juridical Aspects of Arab Securities Regulation (Kluwer Law International 2012) 137.

  135. 135.

    P Latimer, supra note 132, 111.

  136. 136.

    I MacNeil, supra note 131, 300.

  137. 137.

    T Singh, ‘Opening Remarks to the Roundtable’ in IFSB, IOSCO and SC (eds), Disclosure Requirements for Islamic Capital Market Products (IFSB, IOSCO and SC 2013) 11.

  138. 138.

    IFSB, IOSCO and SC, ‘Forward’ in IFSB, IOSCO and SC (eds), Disclosure Requirements for Islamic Capital Market Products (IFSB, IOSCO, SC 2013) 1.

  139. 139.

    Ibid.

  140. 140.

    Ibid.

  141. 141.

    M Azmi ‘The Importance of Strong Disclosure Regime in Facilitating Cross-Boarder Investments and Development of Islamic Capital Market Products and Services’ in IFSB, IOSCO and SC (eds), Disclosure Requirements for Islamic Capital Market Products (IFSB, IOSCO and SC 2013) 77.

  142. 142.

    Ibid.

  143. 143.

    P Casey, supra note 12, 31.

  144. 144.

    H Sabeti-Rahmati, ‘Commentary One’ in IFSB, IOSCO and SC (eds), Disclosure Requirements of Islamic Capital Market Products (IFSB, IOSCO, SC 2013) 84.

  145. 145.

    See generally C Lee, ‘Commentary Three’ in IFSB, IOSCO and SC (eds), Disclosure Requirements of Islamic Capital Market Products (IFSB, IOSCO and SC 2013).

  146. 146.

    Ibid. 60.

  147. 147.

    Ibid.

  148. 148.

    Ibid. 65.

  149. 149.

    Ibid.

  150. 150.

    Ibid.

  151. 151.

    See IFSB, ‘Disclosures to Promote Transparency and Market Discipline for Institutions offering Islamic Financial Services (excluding Islamic Insurance (Takâful) Institutions and Islamic Mutual Funds)’ (IFSB, December 2007). http://www.ifsb.org/standard/ifsb4.pdf. Accessed 5 March 2015.

  152. 152.

    IOSCO, ‘International Disclosure Principles for Cross-Border Offerings and Listings of Debt Securities by Foreign Issuers’ (IOSCO, March 2007). https://www.iosco.org/library/pubdocs/pdf/IOSCOPD242.pdf. Accessed 5 March 2015.

  153. 153.

    These are as follows:

    • Principle 16: There should be full, accurate, and timely disclosure of financial results, risk, and other information, which are material to investors’ decisions.

    • Principle 18: Accounting standards used by issuers to prepare financial statements should be of a high and internationally acceptable quality.

    • Principle 35: Regulation should promote transparency of trading.

  154. 154.

    There are as follows: Identities of parties responsible for the document; Description of the debt securities; Risk factors; Markets; Information about the public offering; Taxation; Selected financial information; Information about the Issuer; Operating and financial review and prospects; Directors, senior management, and employees; Major shareholders and related party transactions; Interests of experts and counsel; Financial information. See IOSCO, ‘International Disclosure Principles for Cross-Border Offerings and Listings of Debt Securities by Foreign Issuers’ (IOSCO, March 2007). https://www.iosco.org/library/pubdocs/pdf/IOSCOPD242.pdf. Accessed 5 March 2015.

  155. 155.

    See AAOIFI, Accounting, Auditing and Governance Standards for Islamic Financial Institutions 1432H-2010 (AAOIFI 2004).

  156. 156.

    Y Wico, ‘Comparative Evaluation of Regulatory and Best Practices on Disclosure of Islamic Capital Market Products’ in IFSB, IOSCO and SC (eds), Disclosure Requirements for Islamic Capital Market Products (IFSB, IOSCO and SC 2013) 27.

  157. 157.

    C Lee, supra note 145, 85.

  158. 158.

    Ibid.

  159. 159.

    This is a survey undertaken by the AOSSG Islamic Finance Working Group, and it aims to understand the views of many countries in the Middle East and North Africa (MENA) about accounting for Islamic financial transactions. The survey has been distributed to accounting and auditing practitioners in 24 countries in MENA. See AOSSG, ‘AOSSG Survey: Accounting and Islamic Finance in the Middle East and North Africa’ (AOSSG, November 2013). http://aossg.org/docs/Publications/AOSSG_MENA_Islamic_Finance_Survey%20Findings_Nov_2013.pdf. Accessed 6 March 2015.

  160. 160.

    Ibid. 4.

  161. 161.

    Ibid.

  162. 162.

    AOSSG, ‘AOSSG Survey: Accounting for Islamic Financial Transactions and Entities’ (ASB, December 2011) 6. https://www.asb.or.jp/asb/asb_e/aossg/pressrelease_20120110_01_e.pdf. Accessed 6 March 2015.

  163. 163.

    M Azmi, supra note 141, 74.

  164. 164.

    IOSCO, ‘Analysis of the Application of IOSCO’s Objectives and Principles of Securities Regulation for Islamic Securities Products’ (IOSCO, September 2008) 5. http://www.iosco.org/library/pubdocs/pdf/IOSCOPD280.pdf. Accessed 10 February 2015.

  165. 165.

    P Casey, supra note 12, 32.

  166. 166.

    Ibid.

  167. 167.

    Ibid.

  168. 168.

    IFSB, ‘Evaluation of Core Principles Relevant to Islamic Finance Regulation’ (IFSB, November 2014) 103. http://www.ifsb.org/docs/WP-02_CPIFR%20%28Nov%202014%29.pdf. Accessed 10 February 2015.

  169. 169.

    P Casey, supra note 12, 33.

  170. 170.

    V Nienhaus, ‘Commentary Two’ in IFSB, IOSCO and SC (eds), Disclosrue Requirements of Islamic Capital Market Products (IFSB, IOSCO and SC 2013) 54.

  171. 171.

    Ibid.

  172. 172.

    Ibid.

  173. 173.

    H Sabeti-Rahmati, ‘Commentary One’ in IFSB, IOSCO and SC (eds), Disclosure Requirements of Islamic Capital Market Products (IFSB, IOSCO, SC 2013) 86.

  174. 174.

    P Casey, supra note 12, 35.

  175. 175.

    Ibid. 36.

  176. 176.

    Ibid.

  177. 177.

    L Alvi, ‘Commentary One’ in IFSB, IOSCO and SC (eds), Disclosure Requirements of Islamic Capital Market Products (IFSB, IOSCO and SC 2013) 46.

  178. 178.

    V Nienhaus, supra note 170, 53.

  179. 179.

    L Alvi, supra note 177, 48.

  180. 180.

    P Casey, supra note 12, 38.

  181. 181.

    Ibid.

  182. 182.

    IFSB, supra note 168, 103.

  183. 183.

    P Casey, supra note 12, 39.

  184. 184.

    M Azmi, supra note 141, 75.

  185. 185.

    P Casey, supra note 12, 39.

  186. 186.

    Ibid.

  187. 187.

    C Lee, supra note 145, 62–63.

  188. 188.

    V Nienhaus, supra note 170, 53–54.

  189. 189.

    H Sabeti-Rahmati, supra note 173, 86.

  190. 190.

    P Casey, supra note 12, 39.

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    Salim Al-Ali

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Al-Ali, S. (2019). Proposed Approaches for the Development of Sound Ṣukūk Markets. In: Raising Capital on Ṣukūk Markets. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-14536-1_8

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