The Role of Sukuk in Islamic Capital Markets
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Table 3.1: Facilitative Roles of Key Market Stakeholders
Market stakeholder Examples of development actions Impact on capital
markets
Government  “Top down” facilitator in promoting the
Islamic finance agenda through
measurable and transparent action
plans.
 Proactive commitment to include sukuk
issuance as a debt-management tool in
budgetary funding.
 Leading issuer in building sovereign
benchmark yield curves.
 Stimulate growth of domestic savings
through regulated pension schemes and
the development of strong institutional
investors (e.g. asset-management
companies, takaful /insurance
operators).
 Fiscal stimulus (e.g. tax incentives) to
promote the country as a point of
origination and investment for sukuk.
 Encourage savers to bring their wealth
stored in physical assets such as real
estate and gold, and bank deposits into
the financial markets.
 Identify suitable state-owned entities
(SOEs) or government-linked companies
(GLCs) to become sukuk champions in
promoting innovative sukuk structures
and creating benchmark yield curves.
 Promote the efficient
use of domestic wealth
through financial
intermediaries.
 Create material sell and
buy sides from the
domestic and
international
communities.
 Establish a robust and
deep capital market.
Regulators  Implement quantifiable master plans
and roadmaps to guide market players
in developing a strong ecosystem for the
sukuk market.
 Promote international best practices
and standards for legal documentation,
enforceability of security, bankruptcy or
insolvency law, dispute resolutions, and
investor protection, among others.
 Encourage onshore issuance of LCY and
FCY sukuk by domestic and
international foreign entities with local
set-ups.
 Educate investors (both institutional
and retail) and issuers on the value
proposition of sukuk and related ICM
products.
 Provider of market/product courses in
developing a pool of certified human
talent for the ICM.
 Attract foreign
investors and
strengthen the liquidity
structure of the
domestic capital
markets.
 Encourage participation
from the sell and buy
sides.