Fitch Cautions on Rule That Could Make Sukuk Similar to Equity
A proposed change to the regime governing global sukuk risks transforming the asset class into an equity-like instrument that can't be assessed by credit-rating companies, according to Bashar Al Natoor, head of Islamic finance at Fitch Ratings.
The so-called AAOIFI Standard 62, aimed at strengthening compliance with Shariah, or Islamic religious laws, would require sukuk issuers to transfer ownership of the underlying assets to the investors. But sukuk-issuing nations can potentially adopt less disruptive ways to implement the rule that would leave the securities ratable, Al Natoor said in an interview.
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