ABU DHABI: The Securities and Commodities Authority (SCA) Board of Directors has approved, during its meeting chaired by Mohamed Ali Al Shorafa, a proposal to exempt companies wishing to list their green or sustainability-linked bonds or sukuk in a local market from registration fees for the year 2023.
The decision aims to highlight the actions taken by the UAE in accordance with a clear agenda to achieve the objectives of sustainable development on more than one level, especially with regard to sustainable economic growth.
Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and COP28 President-Designate, said, “The SCA initiative for green and sustainability-linked bonds and sukuk is an excellent initiative that aligns perfectly with the broader COP28 agenda with regards to climate finance. The world as a whole needs to do more to advance sustainability in the financial space that in parallel also helps to contribute to sustainable long term economic growth.”
For his part, Al Shorafa stated, “The decision of Authority’s Board of Directors comes in line with the declaration of President His Highness Sheikh Mohamed bin Zayed Al Nahyan, declaring 2023 as the ‘Year of Sustainability’, and supports the SCA efforts to encourage companies to move towards issuing green and sustainability-related bonds and sukuk to finance sustainable projects related to the environment and climate, and encourages investors and companies to adopt environmentally friendly investment opportunities."
The registration fee for bonds and sukuk for the purpose of listing, which the Board agreed yesterday to waive temporarily, is determined by the Chairman of the Authority’s Board of Directors Decision No. (32 / R.M.) of 2018 regarding the due technical service fees at a rate of 0.01 percent of the value of the issue subject to a maximum of AED 30,000.
In February 2023, the SCA issued its Decision No. (21 / R.M.) of 2023 regarding the regulation of sustainability-linked green bonds and sukuk, as this decision allowed public shareholding companies to issue “green” bonds and sukuk whose entire subscription proceeds are used to finance or refinance eco-friendly sustainable projects (such as renewable energy projects, energy efficiency projects, pollution prevention and control projects, environmentally sustainable management projects for natural resources and land use, projects for preserving terrestrial and aquatic environmental diversity, clean transport projects, and sustainable management of water and wastewater projects), as well as companies’ issuance of sustainability-related bonds and sukuk, through which the sustainability goals specified by the issuing company are achieved within a predetermined period to contribute to the achievement of key performance indicators, and to bear structural and/or financial features and characteristics depending on the issuing company’s achievement of sustainability goals.