The Role of Sukuk in Islamic Capital Markets
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Figure 3.5: HM Treasury UK Sovereign Sukuk Plc –Ijarah Sukuk Structure
Source: HM Treasury UK Sovereign Sukuk Plc Offering Circular (30 June 2014)
3.3.5 ANALYSIS OF SUKUK STRUCTURES ISSUED BY OIC AND NON-OIC COUNTRIES
The difference in the types of Shariah contracts frequently adopted in Malaysia
(predominantly murabahah) compared to other countries is due to the varying opinions of
Shariah experts. For example, trading of debt or bay’ al-dayn is a common practice in Malaysia
following the SAC of the SC’s acceptance of the principle of bay’ al-dayn as one of the concepts
for the development of Malaysia’s ICM instruments in August 1996 (Securities Commission
Malaysia, 2007).
Unlike ijarah or equity-based Shariah contracts, which represent beneficial interests or rights
over an asset or equity venture, sale-based sukuk denotes the sukuk holders’ rights to receive
payments under the murabahah sale price, which is essentially a debt. The argument by the
SAC of the SC on the permissibility of bay’ al-dayn is explained in the Resolutions of the SC’s
SAC, which state that there is no general nas or consensus (ijma’) among Islamic jurists to
forbid it. This proactive approach has facilitated Malaysia’s success in attracting corporate
issuers that face problems in securing the requisite assets to meet the sukuk guidelines.
Some Shariah scholars may view Malaysia’s approach as accommodative. However, market
practitioners believe a balance between commercial reasoning and Shariah requirements is
pertinent to building the necessary base for a strong ICM. The tightening of Shariah
governance will always be an ongoing development as a domestic sukuk market grows in line
with international best practices that satisfy globally accepted Shariah requirements.
As described earlier in Box 3.4, the AAOIFI’s Shariah standards on sukuk, any trading of sukuk
must be backed by tangible assets. Accordingly, almost all sovereign sukuk issues have opted