The Securities and Exchange Commission (SEC) of the Philippines has drafted rules to facilitate the issuance of sukuk or Islamic bonds by Philippine companies. This move aims to foster the growth of Islamic finance in the country.
The Securities and Exchange Commission (SEC) has drafted rules to facilitate Philippine companies' issuance of sukuk or Islamic bonds. The SEC said the drafting of the guidelines and disclosure for sukuk bonds are part of its strategy to promote the development of Islamic banking and finance in the country. This will also create opportunities for Philippine companies to access the sukuk market.
The SEC stated that sukuk or Islamic bonds represent an important avenue for companies in international fundraising and investment activities, generating cross-border flows globally. It is also the most popular financial instrument in the Islamic capital market. Aside from the national government, other entities allowed to issue sukuk bonds are special purpose vehicles (SPV) created specifically for sukuk issuances and publicly listed companies through an SPV. It said an SPV planning to offer sukuk bonds should register with the SEC and should have a minimum authorized capital stock of P125 million and a minimum paid-up capital of P31.25 million. An SPV’s article of incorporation should also define its primary purpose for the issuance of sukuk bonds. Its by-laws should include provisions ensuring that its operations are compliant with Shari-ah principles and that it may engage in other business activities provided that the total non-permissible income from such activities does not exceed 5 percent of the total income and does not affect the company’s reputation. Sukuk bond issuers will also be required to appoint an accredited Shari-ah supervisory board to certify that the sukuk structure and underlying assets comply with Shari-ah principles. The government was reportedly planning to issue sukuk bonds this year as part of its financing strategy. It first issued Islamic bonds in December 2023, raising $1 billion from the sale of 5.5-year dollar-denominated Sukuk bonds
Sukuk Islamic Finance Philippines Securities And Exchange Commission Investment
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