Treasury moves to put Islamic finance on level footing
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The Treasury has introduced measures in parliament to support Islamic finance and the issuance of corporate sukuk within the UK.
Sukuk securities are structured to comply with Islamic law and its investment principles, which prohibits the charging or paying of interest
The Financial Services and Markets Act 2000 Order 2010 will aim to provide a level playing field for corporate sukuk within the UK.
The Order provides clarity on the regulatory treatment of corporate sukuk, reducing the legal costs for these types of investments and removing unnecessary obstacles to their issuance.
Sukuk are a broad class of financial instruments designed to replicate the economic function of bonds, but with a structure which complies with Islamic principles.
Exchequer Secretary to the Treasury Sarah McCarthy-Fry says: “The Government’s objectives on Islamic finance are to enhance the UK’s competitiveness in financial services by maintaining the UK’s position as a Western leader for international Islamic finance and to ensure that everybody, irrespective of their religious beliefs, has access to competitively priced financial products.”
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