New toolkit provides standardised structures, model transaction flows and legal documents to make Sukuk issuance easier for companies.
ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued a “Practical Guide and Toolkit for Corporate Issuers” aimed at standardising Sukuk structures and documentation and making corporate Sukuk issuance simpler, faster and more cost-effective.
According to a statement issued on Monday, the initiative has been introduced in line with the Ministry of Finance’s direction to deepen Pakistan’s corporate debt market and enable more companies to raise Shariah-compliant financing through the capital market.
The SECP said the growing importance of Islamic financing was reflected in the issuance of 72 Sukuk during the last fiscal year, which collectively raised around Rs307 billion.
Guide Aims to Reduce Issuance Complexities
The new toolkit provides a step-by-step overview of the Sukuk issuance process, covering regulatory requirements, standardised structures, model transaction flows, sample applications and illustrative legal documents.
The regulator expects the guide to reduce legal and structuring complexities, transaction costs and issuance timelines, particularly for companies accessing the Sukuk market for the first time.
The initiative is also intended to provide greater clarity and consistency to corporate issuers dealing with the regulatory and documentation requirements associated with Sukuk transactions.
By providing standardised templates and practical guidance, the SECP expects companies to have a clearer understanding of the steps involved in structuring and launching Shariah-compliant debt instruments.
SECP Targets Deeper Islamic Capital Market
The guidebook was developed using the SECP’s regulatory experience and consultations with its Shariah Advisory Committee, industry experts, legal practitioners and other relevant market participants.
The initiative also addresses a key recommendation emerging from the Corporate Debt Market Survey, which highlighted the need for standardised Sukuk structures and documentation to facilitate greater participation in the corporate debt market.
The SECP said the toolkit would broaden financing options available to companies while supporting the development of Pakistan’s corporate debt market and Islamic capital markets.
The regulator expects greater standardisation to encourage more corporate issuers to access the capital market for Shariah-compliant financing, reduce barriers to issuance and contribute to the expansion of Pakistan’s Islamic finance ecosystem.
The initiative is also expected to strengthen the role of Sukuk as an alternative source of corporate financing and support efforts to develop a deeper and more diversified domestic debt market.