Sukuk Market Overview, Structures & Standardization
14th Meeting of the OIC Exchanges Forum
Thursday, 8th October 2020
Ijlal Ahmed Alvi
Chief Executive Officer
IIFM
Total GLOBAL Sukuk Issuances (Jan 2001 - Dec 2019) - All Tenors, All Currencies (in USD Millions)
Source: IIFM Sukuk Report 9th Edition Total Global Sukuk Issuance USD 1.247 Trillion
1
66.830
50.184
24.337
37.927
53.125
93.173
137.599 135.557
107.300
67.818
87.784
116.717
123.150
145.702
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
160.000
2001-2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
14th Meeting of the OIC Exchanges Forum, 8th October 2020
Total INTERNATIONAL Sukuk Issuances (Jan 2001 - Dec 2019) - All Tenors, All Currencies (in USD Millions)
Total International Sukuk Issuance USD 289.92 Billion
21.556
14.002
2.210
7.023
4.248
8.684
20.269
22.992
26.730
21.880
31.210
37.648
32.988
38.476
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
45.000
2001-2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: IIFM Sukuk Report 9th Edition
14th Meeting of the OIC Exchanges Forum, 8th October 2020 2
Total DOMESTIC Sukuk Issuances (Jan 2001 - Dec 2019) - All Tenors, All Currencies (in USD Millions)
Total Domestic Sukuk Issuance to date is USD 957.28 Billion
45.275
36.182
22.127
30.904
48.877
84.490
117.331112.565
80.570
45.938
56.574
79.069
90.162
107.226
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
2001-2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: IIFM Sukuk Report 9th Edition
14th Meeting of the OIC Exchanges Forum, 8th October 2020 3
STRUCTURAL BREAK-UP OF DOMESTIC SUKUK ISSUANCES FOR THE YEAR 2018- ALL TENORS (USD MILLIONS)
4
Source: IIFM Sukuk Report 9th Edition
14th Meeting of the OIC Exchanges Forum, 8th October 2020
STRUCTURAL BREAK-UP OF DOMESTIC SUKUK ISSUANCES FOR THE YEAR 2019- ALL TENORS (USD MILLIONS)
5
Source: IIFM Sukuk Report 9th Edition
14th Meeting of the OIC Exchanges Forum, 8th October 2020
STRUCTURAL BREAK-UP OF INTERNATIONAL SUKUK ISSUANCES FOR THE YEAR 2018- ALL TENORS (USD MILLIONS)
6
Source: IIFM Sukuk Report 9th Edition
14th Meeting of the OIC Exchanges Forum, 8th October 2020
STRUCTURAL BREAK-UP OF INTERNATIONAL SUKUK ISSUANCES FOR THE YEAR 2019- ALL TENORS (USD MILLIONS)
7
Source: IIFM Sukuk Report 9th Edition
14th Meeting of the OIC Exchanges Forum, 8th October 2020
IIFM Sukuk Al Ijarah Standard Documentation Templates
The template Sukuk Al Ijarah ("IIFM Sukuk Al Ijarah Standard Documentation Templates") comprise the following:
1. Prospectus
2. Sale and Purchase Agreement
3. Lease Agreement
4. Service Agency Agreement
5. Purchase Undertaking
6. Sale and Substitution Undertaking
7. Declaration of Trust
14th Meeting of the OIC Exchanges Forum, 8th October 2020 8
Objective
To facilitate and ease the issuance of asset based Sukuk Al Ijarah in a Shari‘ah compliant manner.
Who is entitled to use?
Any Islamic financial industry participant can use the IIFM Template Sukuk Al Ijarah Documents. Its use isnot restricted to IIFM members only.
IIFM Sukuk Al Ijarah Standard Documentation Templates
914th Meeting of the OIC Exchanges Forum, 8th October 2020
Governing Law
Giving flexibility for both civil law and common law jurisdictions
With regard to “Trust Assets” Use of the phrase "ownership interest, rights, title, benefits and entitlements" throughout the suite of Template Sukuk Al Ijarah Documents is intended to give flexibility so that the Template Sukuk Al Ijara Documents can be used in both civil law and common law jurisdictions.
Points to be observed
Local counsel advice will be required on a transaction specific basis to ensure the correct legal right is being transferred to the Purchaser in the relevant jurisdiction.
Further consideration will also be required in each specific jurisdiction as to whether there is a recognised concept of a "trust" and if there is a distinction between legal and beneficial ownership.
IIFM Sukuk Al Ijarah Standard Documentation Templates
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Retail Sukuk Secondary Market Trading on Stock Exchanges
Availability of Investment Products to Support Retail Investors
Sukuk & Role of Stock Exchanges
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About IIFM
History
IIFM is hosted in Manama by the Central Bank of Bahrain (CBB) and was established in 2002 under Royal Decree No (23) Year 2002 of the Kingdom of Bahrain as a neutral and non-profit Islamic infrastructure development institution by the collective efforts of the Islamic Development Bank, Autoriti Monetari Brunei Darussalam (formerly Ministry of Finance Brunei Darussalam), Bank Indonesia, Bank Negara Malaysia (delegated to Labuan Financial Services Authority), Central Bank of Bahrain (formerly Bahrain Monetary Agency) and the Central Bank of Sudan.
IIFM VisionActive and well regulated trading and capital flows across the full spectrum of Shari’ah-compliant financial instruments internationally.
IIFM MissionTo achieve the Vision by catalyzing both national and international trading infrastructure, product innovation and information flow within strong, transparent and well regulated standards and guidelines. Promote acceptance and integration with mainstream markets.
Mandate
To develop standardized Shari’ah-compliant Financial Documentation, Product Confirmations and Guidelines for the IFSI
Continuation on next slide…
1214th Meeting of the OIC Exchanges Forum, 8th October 2020
IIFM Value Proposition
Focus on providing well defined services to the Islamic Financial Services Industry (IFSI) as follows:
Publish practical and ready-to-use globally standardized Shari’ah-compliant Financial Documentation, Product Confirmations and related Guidance Notes, Shari’ah Pronouncements as well as jurisdiction specific Legal Opinions
Create industry awareness and share technical knowledge on IIFM Standards by organizing specialized seminars, technical workshops and standardization specific industry consultative meetings
Publish annual Sukuk Report and periodic Concept Papers on specific topics
About IIFM
1314th Meeting of the OIC Exchanges Forum, 8th October 2020
ShukranWassalamu ‘Alaikum
International Islamic Financial Market (IIFM)Office 72, 7th Floor, Zamil Tower , Government Avenue, P.O. Box: 11454, Manama, Kingdom of BahrainTel: +973 17500161 , Fax: +973 17500171, Email: [email protected], Website: www.iifm.net
Disclaimer: The information herein has been obtained from sources believed to be reliable but cannot be guaranteed. The views or opinions expressed are subjected to change at any time. Neither the information nor any opinion expressed can be construed as a solicitation for the purchase or sale of any securities. International Islamic Financial Market disclaims liability in this respect.