sukuk market overview, structures & standardization

Sukuk Market Overview, Structures & Standardization

14th Meeting of the OIC Exchanges Forum

Thursday, 8th October 2020

Ijlal Ahmed Alvi

Chief Executive Officer

IIFM

Sukuk Market Overview

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



Sukuk Structural Breakup

STRUCTURAL BREAK-UP OF DOMESTIC SUKUK ISSUANCES FOR THE YEAR 2018- ALL TENORS (USD MILLIONS)

4



STRUCTURAL BREAK-UP OF DOMESTIC SUKUK ISSUANCES FOR THE YEAR 2019- ALL TENORS (USD MILLIONS)

5



STRUCTURAL BREAK-UP OF INTERNATIONAL SUKUK ISSUANCES FOR THE YEAR 2018- ALL TENORS (USD MILLIONS)

6



STRUCTURAL BREAK-UP OF INTERNATIONAL SUKUK ISSUANCES FOR THE YEAR 2019- ALL TENORS (USD MILLIONS)

7



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


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.



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.



Retail Sukuk Secondary Market Trading on Stock Exchanges

Availability of Investment Products to Support Retail Investors

Sukuk & Role of Stock Exchanges


About IIFM

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…


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


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.