Overly-complex Islamic finance structures such as the
Nakheel sukuk leave open the potential for disruptive
behavior, according to a Dubai Financial Services Authority
Complex Islamic finance structures which seek to replicate
conventional products often require a large number of complex
agreements, which in turn can lead to a large number of legal
challenges down the line.
"All it does is give lawyers the opportunity to raise a new
set of issues and to try it on on behalf of their clients,"
said Peter Casey, head of Islamic finance at the DFSA, speaking
at an IBA session 'Islamic securities and structured products:
new products or new paradigms?' on October 31.
Casey cited the example of UAE property company Nakheel's
sukuk al ijara, which required 19 separate agreements and 17
pieces of legal documentation to cover...