The Securities and Commodities Authority (SCA) participated in a seminar titled “Development of Sukuk Markets in the Middle East and Africa: Growth Potential and Policy Considerations”. The seminar took place in Abu Dhabi and was jointly organized by the Islamic Financial Services Boards (IFSB), the Africa/Middle East Regional Committee (AMERC) of the International Organization of Securities Commissions (IOSCO), the Dubai Islamic Economy Development Centre (DIEDC), the Gulf Bond and Sukuk Association (GBSA), and S&P Global Ratings.
At the opening of the seminar, Dr. Obaid Saif Al Zaabi, SCA’s CEO, delivered a keynote speech in which he gave a brief overview of the reasons that led to the emergence of Islamic capital markets. He said that the United Arab Emirates has emerged as a popular destination for sukuk listing given its legal system that complies with shari'ah principles. He added that the Global Islamic Economy Indicator (GIEI) ranked the UAE second, after Malaysia, in 2017 in the total value of currently listed sukuk.
Dr. Al Zaabi said that the total Islamic finance assets are expected to amount to $3.5 trillion by 2021, adding that a Thomson Reuters report estimates that Islamic funds will grow to $77 billion at least by early 2019.
He said that SCA is considering a plan to regulate over-the-counter (OTC) capital market transactions and will be carrying out studies to examine the feasibility of establishing local rating agencies to spur the issuance of local currency retail sukuk by the corporate sector.
The event brought together financial/economic policy makers, senior management from the ministries of finance and economy, supervisory and regulatory authorities, international organizations, debt management offices, market players, and relevant stakeholders.
The seminar was organized in four sessions and dealt with Islamic finance and sukuk, the role of sukuk in addressing developmental goals, technological innovation and its potential for growth of Islamic capital markets, and strengthening the legal and regulatory frameworks to enhance investor protection and stability of sukuk markets.
The seminar aimed at building a better understanding of Islamic finance, its distinguishing features, and the developments taking place in sukuk markets, including innovative and sustainable development trends. It also aimed to examine the recent developments and the future potential of sukuk markets in the Middle East and Africa and to identify areas where further development is needed to bolster the growth of these markets and to utilize them effectively in realizing the developmental objectives of the region. The seminar also discussed aspects related to strengthening the regulatory environment, including the relevant considerations relating to investor protection and stability that arise from the development and growth of sukuk markets, taking into consideration the specificities and difference between sukuk and their conventional counterparts, in order to strengthen the overall growth and resilience of the region’s capital markets.
Participants in the seminar sought to identify the most pressing gaps in the existing institutional, legal, and regulatory frameworks of member jurisdictions that may affect growth, stability, resilience, and protection of investors in sukuk markets and capital markets as a whole. The seminar identified the relevant focus areas for policymakers and international standard-setters to address the above issues.
The welcoming remarks were made by Michael Grifferty, GBSA’s President. Dr. Bello Lawal Danbatta, IFSB’s Secretary-General, moderated one of the sessions while Paul Muthaura, AMERC’s Chair, delivered a keynote speech.