Bahrain-based IIFM publishes major sukuk documentation

The suite of standards consists of prospectus, master mudarabah agreement and declaration of trust


MANAMA: The International Islamic Financial Market (IIFM), a Bahrain-based developer of Sharia-compliant financial contracts and product templates, has published ‘Perpetual Sukuk Al Mudarabah Tier 1 Standard Documentation’.

The suite of standards consists of prospectus, master mudarabah agreement and declaration of trust.

The purpose of the templates is to provide the industry with a standardised set of documents addressing clauses that are repetitive, require transparency and clarity during the drafting of the sukuk prospectus and related issuance documentation, while also standardising definitions and updating Sharia requirements.

Tier 1 sukuk issuers, lead arrangers, legal advisers and other related parties are expected to benefit from the standards leading to efficiency and cost reduction in drafting of voluminous sukuk documentation for issuers and offer greater transparency and comfort to investors.

Describing the publication of the standards an important milestone, IIFM chairman Khalid Hamad said the conventional banking industry has greatly benefited from self-imposed rules and the standard-setting body is playing the same role for the orderly development of the Islamic industry.

Dubai Islamic Bank Group chief executive Dr Adnan Chilwan has accentuated the significance of standardisation in Islamic capital markets.

“The IIFM Standard Sukuk Al Mudarabah documentation, which is based on international Sharia best practices, provides robust documentation that can be adopted seamlessly across all jurisdictions. Consequently, issuers will not only be able to ensure wider acceptability for their sukuk, but will also be able to access the Islamic capital market in a time and cost-efficient manner,” he added.

The standards were launched during a webinar with more than 130 participants from around 84 institutions based in 23 countries in attendance.

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