IslamicFinance.de

The Securities and Commodities Authority (SCA) has issued a new set of regulations for the bonds and sukuk market cutting the minimum value of issuance from Dh50 million to Dh10 million. The regulations include a shortened approval time of five days, and the removal of the requirement to obtain a credit rating. Additionally, bond issuers are no longer required to provide a quarterly report as they may only provide an audited annual financial statement within 180 days of the year-end. The new set of regulations aims to give momentum to the market, and strengthen the UAE’s role as a financial hub for global Islamic economy. However, the regulations do not apply to government entities and companies wholly owned by the government.

The UAE is in the final stages of creating debt issuance and listing regulations that will help develop a domestic credit market and encourage the sale of Islamic bonds. The Securities and Commodities Authority, or SCA, has circulated draft rules that for the first time to treat sukuk and non-Shariah compliant debt separately. The regulator is seeking feedback from market participants by the end of the year and “hopes” to enact the regulations early in 2014. The UAE must develop local debt markets to help state-run and private companies find alternatives to bank loans because it is the only one in the six-nation Gulf Co-operation Council that doesn’t have a domestic, local-currency debt market.