Sukuk – A Sharia Advisory Perspective
Vol. 4, Issue 29 20th July, 2007 www.islamicfinancenews.com1 Sector Report
By: El Waleed M. Ahmed Legal Consultant, Head of Foreign Affairs Department, Kuwaiti Lawyer Firm (Yaqoub Al-Munayae & Aisha Al-
Shaiji Law Firm), Kuwait. elwaleed@kuwaitilawyer.com
Sharia law is open to interpretation and religious boards frequently hold different views on
key Sharia issues. Furthermore, Islamic jurisdiction is not bound by precedent and legal
opinions may deviate from previous decisions made by other Sharia scholars. Thus, a
Sharia board has considerable discretion in the interpretation of Islamic law and may
choose any school of thought to inform its decision-making process.
Sharia boards in the Middle East and elsewhere that approve Islamic Sukuk for sale to
Muslims hold slightly different interpretations about what is acceptable, making Islamic
investor nervous about buying Islamic bonds from outside their own jurisdiction. Complex
Sukuk structures involve challenging procedures and require extensive and costly advice –
both legal and religious – in addition to diverse sets of skill and resources to make them
work. Therefore, corporations and banks often shy away from such structures due the legal
risks and the potential costs of pioneering such instruments. Notwithstanding this, Sharia
is dynamic and, like all jurisprudence, is open to various interpretations.
The Achilles’ heel in the global acceptance and growth of Islamic finance is the level of
standardization of Sharia boards’ rulings. There is yet to emerge a consistent ruling of
Islamic law on the religious compliance of certain assets and transaction structures in
terms of Sharia law. Sharia boards from different Islamic financial institutions may have
different interpretations and advise differently because, in Islam, there is no generally
accepted codification of the jurisprudence. In a conventional sense, that can lead to
uncertainty and confusion.
Detailed explanations of Islamic finance principles or definitions of the role of a Sharia
board in an Islamic financial institution are not delved into in this article, as these are
rudimentary issues for readers if Islamic Finance news. Rather, here we will look into the
absence of standardized Sharia board rulings at the national and international level, an
issue that may have negative effects on the growth and acceptance of the global Islamic
finance industry. Furthermore, the necessity for a unified Sharia board at a national and
international level is highlighted. Recommendations are also made regarding the role of
the Sharia board in the harmonization and configuration of various Sharia board rulings
across the globe to develop new Islamic finance instruments.
1www. Islamicfinancenews.com, specialized online Islamic finance publication from Malaysia
2
Functions and role
Broadly speaking, the three key functions of Sharia boards are:
• to provide advice to Islamic financial institutions;
• to supervise and audit transactional procedures of Islamic financial institutions; and
• to supervise and actively participate in the creation of innovative Sharia compliant
investment and financing products and services.
The effects of non-standardized Sharia rulings
Uncertainty and confusion
The absence of a universally accepted central religious authority is largely a result of the
lack of uniformity in religious principles applied in different Islamic countries across the
world. Sharia boards at individual banks have their own way of defining what is and is not
Islamic banking. This results in different transactions being interpreted differently, hence
leading to a single identical financial transaction having various interpretations across
different Sharia boards. This causes uncertainty about what is the acceptable way to do
business in the Islamic banking and finance system. Further, the assessment of risk for
both the financial institution and the customer can become complicated. The way Sharia
advisory boards of Islamic financial institutions function thus remains a source of
confusion.
Not replicable
The difference in interpretations of Sharia laws means that one Islamic bank may not be
able to “copy” another Islamic bank’s products, and this can stifle the growth and
integration of Islamic finance at both national and international levels.
Sluggish market
The lack of standardization is a contributory factor to the sluggish trading level on the
Sukuk market. This prevents investors from knowing what risks they are assuming when
they invest and increases the costs associated with Sukuk issuance.
Standardization needs
Conformity or similarity among the Sharia supervisory boards of Islamic financial
institutions is urgently required to extend the possibilities in concept and application in the
industry. Establishing Sharia boards at a global and Central Bank level is required to
expedite and develop some standard guidelines in the conduct of Islamic financial
transactions. Standardization is necessary to circumvent any contradictions and
inconsistencies between different Fatwa rulings and their application by these institutions
with a view to activating the role of the Sharia supervisory boards of Islamic financial
institution.
There is also the important factor of mutual recognition of financial standards and
3
products across jurisdictions. The progressive harmonization of Sharia, in this respect,
needs to be viewed as an attribute towards greater international financial integration.
Moreover, supervision and regulation at the national and regional levels are necessary
safeguards against potential improper practices. Such improper practices can cast a doubt
on the credibility of all participants. Sharia scholars from around the world should
contribute towards greater understanding and international convergence. Such
convergence and harmonization can only happen with greater engagement among the
regulators, practitioners and scholars in Islamic finance in the international community.
The existence of a unified Sharia board via a council representing different Islamic school
of thought, nationally and internationally, is necessary. This would facilitate the
conformity of different types of financial services to Islamic law and in addition would
define cohesive rules to expedite the process of introducing new products.
The early engagement of a Sharia supervisory board in an Islamic financial institution,
together with other financial personnel, in the creation of a new Sukuk is of utmost
importance so as to build a solid Islamic foundation for the new product. It also paves the
way for speedier creation of the Sukuk. Furthermore, it is crucial that the Sharia board
actively participates in the creation of Sukuk, in addition to their supervisory role.
Necessary steps
In order to promote a global standard for Islamic finance instruments, there are a couple of
key steps that must be taken.
Adoption of AAOIFI standards
The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)
has taken the lead by preparing Sharia standards. These have been adopted by a number of
government authorities and Central Banks, which will form an avenue for Sharia
compliance and also product innovation.
Cooperation and collaboration
Collective effort with international collaboration between major Islamic financial
regulatory bodies such as the Islamic Financial Services Board (IFSB), AAOIFI and
Central Banks in Islamic countries is important in strengthening the fabric of Islamic
finance.
Recommendations
Islamic finance instruments, particularly Sukuk, are becoming an increasingly important
consideration – for both Muslims and non-Muslims – from the perspective of investment
and product innovation. The issuance of Sukuk is a vital mechanism for raising money in
the capital markets. Sukuk have unique characteristics and offer significant benefits,
unlike other Islamic banking vehicles. At the same time, a few recommendations are
essential for continuous improvement of the functions of Sharia boards and for achieving a
global standard for Sukuk. These are as follows:
4
(1) Training in economics, investments and legal issues related to investments and product
innovation. The lack of knowledge about modern economic and legal issues can weigh
down the ability of Sharia scholars to issue well-informed rulings on financial
products and investment activities.
(2) Placing specialized Sharia scholars onto separate Sharia boards for different projects to
work more efficiently on projects best suited to their particular areas of expertise. This
process will ensure that the right scholars in the right numbers develop, certify and
supervise the financial products and services endorsed by Islamic financial institutions.
(3) Sharia boards should be independent from financial institutions to ensure transparency
and efficiency when giving opinions on the proposed contracts and transactions.
(4) Working closely with financial institutions and lawyers so as to develop new Islamic
financial instruments.
(5) There is a nagging concern about the availability of suitably qualified Sharia advisors.
Their numbers need to be increased in order to avoid stretching the current advisors.
This will allow more Sharia compliant transactional procedures and more time to be
spent with economists and investment practitioners to develop new Islamic financial
products.
(6) Financial institutions need to develop operating procedures to ensure that no form of
investment or business activity is undertaken that has not been approved in advance by
the religious board.
(7) From the outset of the Sukuk structure, Sharia advisors should make an inspection to
ensure the product concept and its process flow is fully implemented according to the
Sharia. Sharia advisors and lawyers should work hand in hand to thoroughly review
the terms and conditions of the Sukuk contract.
Conclusion
Flexibility is a major strength of Islamic finance. This implies that a broad variety of
products can be tailored to each client’s needs. The difference in opinion between rulings
of different Sharia boards is in a way advantageous, as it brings about more innovation
and creates new room for Sukuk structures and Islamic finance instruments. In the process
of providing remedies, the principles of Sharia are not to be compromised as they are
essential in dynamic markets like the current Islamic financial market.
Monday, September 24, 2007
Monday, September 10, 2007
The Essential Legal Regulation Reform For Islamic Finance's Accommodation and Growth in UK & US:
The Essential Legal Regulation Reform
For Islamic Finance's Accommodation and Growth in UK & US:
By: El Waleed M. Ahmed, Legal Consultant, Head of Foreign Affair Department, Kuwaiti Lawyer Firm (Yaqoub Al-Munayae & Aisha Al-Shaiji Law Firm), Al-Jabriya –Kuwait. LL.M Degree "Master of Laws" From Temple University School of Law Philadelphia-PA USA. E-mail: elwaleed@kuwaitilawyer.com
Islamic Finance in US:
Islamic banking products are available in the US, but the officials there have not been as aggressive in promoting the concept as their counterparts in UK. Even Although the US remains for many Islamic investors an important market because of its depth and diversity. Furthermore, Middle Eastern investors flush with oil profits are looking for new places to invest, and American Muslims are looking to invest in a way that does not conflict with their faith. Therefore, the US remains an attractive market to invest in. As most of the investors in the, Middle East, particularly in the GCC, are US dollar based, by investing in the US, GCC investors can avoid currency risk.Difficulties facing Islamic Finance in the US;
But the US still remains relatively closed to Islamic financial institutions and some of the challenges to conduct Islamic financial transactions in the USA relate to familiarity and understanding of Islamic finance itself, and the US regulatory framework such as offering a profit-and-loss sharing deposit is a particularly difficult proposition under US legal framework, which takes the certainty of deposit principal as a given. But in Islamic banking Profit-and-loss sharing deposits are typically structured so that the bank has something akin to a joint investment with the depositor, with returns based on a portion of the profits earned and not on a set rate, so if the bank loses money, so does the account holder. Anther difficulty facing Islamic banking in US the set of restrictions placed on the range of permissible investments that commercial banks may hold. To ensure that banks do not assume unnecessary risk, their investments are generally limited to fixed-income, interest-bearing securities, which are prohibited by the sharia. In addition, commercial banks in US generally must meet numerous disclosure requirements in order to comply with regulatory policy such as the "Truth in Lending Act". These requirements typically mandate advance disclosure of APR 'Interest rate" and other terms that do not fit the principles on which Islamic finance is structured.
Moreover, In the US, there is a complex system of financial services regulation, which divides responsibility for supervision among a number of federal and state agencies. In addition, one of the main challenges facing U.S. and Western regulators is to accommodate the free exercise of religion and still carry the secular mandate of fostering safe and sound practices in the banks that they supervise.
Furthermore, there is difficulty for Muslim consumers in obtaining sharia-compliant insurance presents another hurdle to the accessibility of Islamic finance in Western markets. Because the financial institution require property insurance and private mortgage insurance to be held on the securitized mortgages they purchase. This requirement forces customers of Islamic financial institutions to purchase traditional insurance for these mortgages which is against sharia principle. Also, many Americans remain hostile to Islamic finance in the wake of September 11 2001, thus many Americans tend to assume that Islamic finance means terrorist finance.
Islamic finance accommodations in US;
The U.S. law is "broad enough to encompass Sharia compliant structures." practitioners can produce products that simultaneously satisfy the demands of secular and religious law. This is so because the U.S. law is silent on matters of religion and because the common law tradition of the Anglo-Saxon legal system is flexible and adaptive. Moreover, the US legal system itself, which is among the most settled legal systems in the world and its dynamism, openness and substantive rather than formalistic approach make reviewing, structuring and documenting Islamic transactions simpler. Thus, the US regulator usually looks beyond the form of the transaction to determine that these structures were the economic equivalent of products already being offered by conventional institutions, and thus were permissible under existing banking law. For example, in a residential net lease-to-own home finance product; it considers this arrangement as a lease-buyback arrangement, rather than an interest-bearing loan. Because the purchase and sale transactions occurred simultaneously, the bank would be acting as a “reckless principal” in such transactions, and they were therefore permitted.
Conclusion;
As the Islamic finance industry has progressed, the involvement of US institutions has likewise increased. Information regarding Islamic finance has become and will likely continue to be more accessible and more widespread. US parties have become more and more comfortable and are not only willing, but actively seeking, to meaningfully participate. Moreover, Interest in Islamic finance has recently boomed as investors seek ways of tapping the wealth being generated by high oil prices and rising religious fervor across the Muslim world. Furthermore, the US investor, who are keen to participate in the flourishing markets of the Gulf but are limited by rules restricting foreign ownership, see Islamic bond "Sukuk" as no more than asset-based securities that give them exposure to markets in the Gulf that they would otherwise be unable to access. Thus, U.S. regulators have already started to make efforts to more fully understand and better foster Islamic finance. Thus, Educational dialogue between regulators and Islamic financial practitioners would be very useful in terms of expanding Islamic finance in the United States
Islamic Finance in UK;
U.K financial regulators have long recognized the growing demand for Sharia-compliant financial services, and recently recognized the importance of sukuk to the Islamic capital markets by introducing legislation to clarify the treatment of sukuk for UK tax purposes.
UK efforts to accommodate Sukuk & the New Tax Regulations:
Thus, the UK new tax law plans to extend its capital gains tax principles to accommodate Islamic bonds by allowing issuers of Islamic bonds in the UK to offset the coupon payments they pay to investors against company profits for tax. But before this reform an issuer of a non-Islamic bond can offset the coupon interest payment against profits, but an Islamic bond "Sukuk" does not qualify for this relief as the coupon payment in Islamic bond "Sukuk" is based on profit rather than interest and profit cannot be offset against profit. But now Sukuk would receive the same tax relief as conventional bonds. Thus, a level playing field is being created, this will allow sukuk to be issued, held and traded in the same way as corporate bonds.
Accordingly, the new rules provide that amounts paid by the issuer in respect of alternative finance investment bonds are deductible for corporation tax purposes under the loan relationships rules. They are taxable as interest, where the holder is subject to income tax; and as a profit under the loan relationships rules.
Furthermore, in order to avoidance tax schemes a number of conditions will have to be met for such arrangements to fall within the scheme. These include: the payments made to the Sukuk holders must not exceed a reasonable commercial return on the amounts subscribed; the arrangements must legitimately be treated as a financial liability of the issuer under International Accounting Standards; and the Sukuk must be listed on a recognized Stock Exchange
Although, In the UK regulatory regime for Islamic finance institutions the existence of Sharia Advisory board and the disclosure of its members are both required. But since Sharia board did not have a sufficiently managerial role in Islamic financial institutions therefore, the FSA regulator will not have to approve its personnel.
Furthermore, one of the most important issues faced by the FSA in its regulation of financial services suitable for the Muslim population in the UK was the treatment of deposits. The UK legal definition of a deposit is: "a sum of money paid on terms under which it will be repaid either on demand or in circumstances agreed by the parties." In other words, money placed on deposit must be capital certain. However with a savings account there is a potential conflict between UK law, which requires capital certainty, and Sharia law, which requires the customer to accept the risk of a loss in order to have the possibility of a return.
Thus, Islamic banks in UK resolved this problem by offering full repayment of the investment but informing the customer how much should be repayable in order to comply with the sharia principle" the risk-sharing formulation". This allows customers to choose not to accept full repayment if they wants to comply with sharia principle. Thus, the depositors are legally entitled to ask for their money back but if they wish to follow Sharia principles they can just ask for a share of the profit/loss.
In addition, Sharia-compliant home finance in Britain provides a good illustration of how regulation has been adapted to level the playing field between conventional and Islamic products. In Islamic mortgage the property must change hands twice — from seller to the bank and from the bank to the customer which means two sets of stamp duty to be paid to the U.K. government. But this disadvantage had been removed by government legislation in 2003.
London as global center for Islamic finance;
Britain is making a bid to become a leading market for Islamic finance in the world by Make London the global center and "the gateway to Islamic finance and trade.
Thus, London is far ahead of rival western financial centers, in terms of its success in attracting Islamic financial business, this is partly because of its geographical location and time zone, which give it an advantage over New York. Moreover, London's advantages include the critical mass of financial markets; its innovative, skilled and large labour force; efficient technological infrastructure; a level playing field for foreign firms; competitive personal and corporate taxation; world class regulation; the language; stability; flexibility and openness to the world have given London its historic advantage. That makes London a hospitable environment for Islamic finance. Therefore, London is seen as an ideal location by companies wanting to issue sukuk because it offers publicity, prestige and an established regulatory regime that attracts investors, potentially enabling companies to raise more money than in other locations.
After the recent tax changes in the UK these will make Sukuk issuance a valid financing option for UK business and most western governments are likely to follow with similar enabling legislation. Thus, these laws will create a level playing field for investing in conventional and Islamic securities. That development will create a huge global market for Sukuk and help the growth of the market and lead Islamic finance into the mainstream of global finance.
For Islamic Finance's Accommodation and Growth in UK & US:
By: El Waleed M. Ahmed, Legal Consultant, Head of Foreign Affair Department, Kuwaiti Lawyer Firm (Yaqoub Al-Munayae & Aisha Al-Shaiji Law Firm), Al-Jabriya –Kuwait. LL.M Degree "Master of Laws" From Temple University School of Law Philadelphia-PA USA. E-mail: elwaleed@kuwaitilawyer.com
Islamic Finance in US:
Islamic banking products are available in the US, but the officials there have not been as aggressive in promoting the concept as their counterparts in UK. Even Although the US remains for many Islamic investors an important market because of its depth and diversity. Furthermore, Middle Eastern investors flush with oil profits are looking for new places to invest, and American Muslims are looking to invest in a way that does not conflict with their faith. Therefore, the US remains an attractive market to invest in. As most of the investors in the, Middle East, particularly in the GCC, are US dollar based, by investing in the US, GCC investors can avoid currency risk.Difficulties facing Islamic Finance in the US;
But the US still remains relatively closed to Islamic financial institutions and some of the challenges to conduct Islamic financial transactions in the USA relate to familiarity and understanding of Islamic finance itself, and the US regulatory framework such as offering a profit-and-loss sharing deposit is a particularly difficult proposition under US legal framework, which takes the certainty of deposit principal as a given. But in Islamic banking Profit-and-loss sharing deposits are typically structured so that the bank has something akin to a joint investment with the depositor, with returns based on a portion of the profits earned and not on a set rate, so if the bank loses money, so does the account holder. Anther difficulty facing Islamic banking in US the set of restrictions placed on the range of permissible investments that commercial banks may hold. To ensure that banks do not assume unnecessary risk, their investments are generally limited to fixed-income, interest-bearing securities, which are prohibited by the sharia. In addition, commercial banks in US generally must meet numerous disclosure requirements in order to comply with regulatory policy such as the "Truth in Lending Act". These requirements typically mandate advance disclosure of APR 'Interest rate" and other terms that do not fit the principles on which Islamic finance is structured.
Moreover, In the US, there is a complex system of financial services regulation, which divides responsibility for supervision among a number of federal and state agencies. In addition, one of the main challenges facing U.S. and Western regulators is to accommodate the free exercise of religion and still carry the secular mandate of fostering safe and sound practices in the banks that they supervise.
Furthermore, there is difficulty for Muslim consumers in obtaining sharia-compliant insurance presents another hurdle to the accessibility of Islamic finance in Western markets. Because the financial institution require property insurance and private mortgage insurance to be held on the securitized mortgages they purchase. This requirement forces customers of Islamic financial institutions to purchase traditional insurance for these mortgages which is against sharia principle. Also, many Americans remain hostile to Islamic finance in the wake of September 11 2001, thus many Americans tend to assume that Islamic finance means terrorist finance.
Islamic finance accommodations in US;
The U.S. law is "broad enough to encompass Sharia compliant structures." practitioners can produce products that simultaneously satisfy the demands of secular and religious law. This is so because the U.S. law is silent on matters of religion and because the common law tradition of the Anglo-Saxon legal system is flexible and adaptive. Moreover, the US legal system itself, which is among the most settled legal systems in the world and its dynamism, openness and substantive rather than formalistic approach make reviewing, structuring and documenting Islamic transactions simpler. Thus, the US regulator usually looks beyond the form of the transaction to determine that these structures were the economic equivalent of products already being offered by conventional institutions, and thus were permissible under existing banking law. For example, in a residential net lease-to-own home finance product; it considers this arrangement as a lease-buyback arrangement, rather than an interest-bearing loan. Because the purchase and sale transactions occurred simultaneously, the bank would be acting as a “reckless principal” in such transactions, and they were therefore permitted.
Conclusion;
As the Islamic finance industry has progressed, the involvement of US institutions has likewise increased. Information regarding Islamic finance has become and will likely continue to be more accessible and more widespread. US parties have become more and more comfortable and are not only willing, but actively seeking, to meaningfully participate. Moreover, Interest in Islamic finance has recently boomed as investors seek ways of tapping the wealth being generated by high oil prices and rising religious fervor across the Muslim world. Furthermore, the US investor, who are keen to participate in the flourishing markets of the Gulf but are limited by rules restricting foreign ownership, see Islamic bond "Sukuk" as no more than asset-based securities that give them exposure to markets in the Gulf that they would otherwise be unable to access. Thus, U.S. regulators have already started to make efforts to more fully understand and better foster Islamic finance. Thus, Educational dialogue between regulators and Islamic financial practitioners would be very useful in terms of expanding Islamic finance in the United States
Islamic Finance in UK;
U.K financial regulators have long recognized the growing demand for Sharia-compliant financial services, and recently recognized the importance of sukuk to the Islamic capital markets by introducing legislation to clarify the treatment of sukuk for UK tax purposes.
UK efforts to accommodate Sukuk & the New Tax Regulations:
Thus, the UK new tax law plans to extend its capital gains tax principles to accommodate Islamic bonds by allowing issuers of Islamic bonds in the UK to offset the coupon payments they pay to investors against company profits for tax. But before this reform an issuer of a non-Islamic bond can offset the coupon interest payment against profits, but an Islamic bond "Sukuk" does not qualify for this relief as the coupon payment in Islamic bond "Sukuk" is based on profit rather than interest and profit cannot be offset against profit. But now Sukuk would receive the same tax relief as conventional bonds. Thus, a level playing field is being created, this will allow sukuk to be issued, held and traded in the same way as corporate bonds.
Accordingly, the new rules provide that amounts paid by the issuer in respect of alternative finance investment bonds are deductible for corporation tax purposes under the loan relationships rules. They are taxable as interest, where the holder is subject to income tax; and as a profit under the loan relationships rules.
Furthermore, in order to avoidance tax schemes a number of conditions will have to be met for such arrangements to fall within the scheme. These include: the payments made to the Sukuk holders must not exceed a reasonable commercial return on the amounts subscribed; the arrangements must legitimately be treated as a financial liability of the issuer under International Accounting Standards; and the Sukuk must be listed on a recognized Stock Exchange
Although, In the UK regulatory regime for Islamic finance institutions the existence of Sharia Advisory board and the disclosure of its members are both required. But since Sharia board did not have a sufficiently managerial role in Islamic financial institutions therefore, the FSA regulator will not have to approve its personnel.
Furthermore, one of the most important issues faced by the FSA in its regulation of financial services suitable for the Muslim population in the UK was the treatment of deposits. The UK legal definition of a deposit is: "a sum of money paid on terms under which it will be repaid either on demand or in circumstances agreed by the parties." In other words, money placed on deposit must be capital certain. However with a savings account there is a potential conflict between UK law, which requires capital certainty, and Sharia law, which requires the customer to accept the risk of a loss in order to have the possibility of a return.
Thus, Islamic banks in UK resolved this problem by offering full repayment of the investment but informing the customer how much should be repayable in order to comply with the sharia principle" the risk-sharing formulation". This allows customers to choose not to accept full repayment if they wants to comply with sharia principle. Thus, the depositors are legally entitled to ask for their money back but if they wish to follow Sharia principles they can just ask for a share of the profit/loss.
In addition, Sharia-compliant home finance in Britain provides a good illustration of how regulation has been adapted to level the playing field between conventional and Islamic products. In Islamic mortgage the property must change hands twice — from seller to the bank and from the bank to the customer which means two sets of stamp duty to be paid to the U.K. government. But this disadvantage had been removed by government legislation in 2003.
London as global center for Islamic finance;
Britain is making a bid to become a leading market for Islamic finance in the world by Make London the global center and "the gateway to Islamic finance and trade.
Thus, London is far ahead of rival western financial centers, in terms of its success in attracting Islamic financial business, this is partly because of its geographical location and time zone, which give it an advantage over New York. Moreover, London's advantages include the critical mass of financial markets; its innovative, skilled and large labour force; efficient technological infrastructure; a level playing field for foreign firms; competitive personal and corporate taxation; world class regulation; the language; stability; flexibility and openness to the world have given London its historic advantage. That makes London a hospitable environment for Islamic finance. Therefore, London is seen as an ideal location by companies wanting to issue sukuk because it offers publicity, prestige and an established regulatory regime that attracts investors, potentially enabling companies to raise more money than in other locations.
After the recent tax changes in the UK these will make Sukuk issuance a valid financing option for UK business and most western governments are likely to follow with similar enabling legislation. Thus, these laws will create a level playing field for investing in conventional and Islamic securities. That development will create a huge global market for Sukuk and help the growth of the market and lead Islamic finance into the mainstream of global finance.
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