Welcome change for sukuks

SUPPLEMENT - MIDDLE EAST - January 01, 2008

Ministerial Order 388 of 2007 amended Executive Regulation 113 of 1992, (executive bylaw of the Decree Law 31 of 1990 for the Regulation of Securities and Foundation of Investment Funds as amended ( the Executive Regulation), and became the first rules promulgated in Kuwait with respect to the issuance of sukuks. Prior to the amendment of the Executive Regulation, Islamic finance companies located in Kuwait needed to go offshore (for example to Bahrain or the Cayman Islands) in order to issue sukuks. Ministerial Order 388 has finally brought sukuks within the ambit of the Executive Regulation.

Article one of the amended Executive Regulation provides the first definition of a sukuk under Kuwaiti regulations. Sukuks are defined as: "the instruments that have equal value issued by companies under certain types of contracts which comply with the Islamic shariah such as musharaka, mudharaba, ijarah or an investment agency in certain investment project or...




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