UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance

Archive for December 6, 2010

Decision No. 137 (3/15) Regarding Rental Sukuk of the Islamic Fiqh Academy of the OIC

 

 

In the Name of Allah, the Beneficent, the Merciful All Praise is for Allah, Lord of the Universe; and blessings and peace be upon our sayyid Muhammad, the Seal of the Prophets and upon all of his family and companions. 

 

Decision No. 137 (3/15) Regarding Rental Sukuk of the Islamic Fiqh Academy of the OIC

The Islamic Fiqh Academy of the OIC, in its fifteenth session, held in Muscat, Oman 14-19 Muharram, 1425 AH/6-11 March, 2004 CE, after hearing the research papers presented to the Academy on the topic of rental sukuk, and after listening to the discussion generated on the subject, has decided the following:

  1. The concept of rental sukuk is based upon the principle of securitization (taskeek, or tawreeq or tasneed), i.e., the issuance of financial certificates amenable to circulation, based upon an investment project producing a revenue stream. The aim of rental sukuk is conversion of the tangible assets and the utility arising from them that are associated with leasing contracts into financial certificates (sukuk) that it is possible to trade in secondary markets. Based upon that, they have been defined as, “certificates of equal value that represent diffused/undivided shares (hisas sha’i ‘ah) in the ownership of tangible assets or their income-generating utilities.”
  2. Rental sukuk do not represent a fixed amount of money, nor are they debts owed by a certain entity―neither a natural nor a legal entity. They are only financial certificates that represent diffused/undivided shares in the ownership of a tangible asset being put to use, such as real estate, an airplane or a ship, or a pool of such assets, whether of the same or differing specifications, when they are leased and, thus, yield a defined revenue as a result of the lease contract.
  3. Rental sukuk may bear the name of their owners, in which case a transfer of ownership is accompanied by an entry in a specific registry or by writing the name of the new owner on the certificate each time ownership is transferred; or they may be anonymous certificates, such that a transfer of ownership is simply effected by a physical transfer of the certificate to the new owner.
  4. It is permitted to issue sukuk that represent ownership of a leased tangible asset―when the conditions are met for property that may validly be the subject of a rental (ijarah) lease, such as real estate, an airplane, a ship, etc.―as long as the sukuk represent ownership of real tangible assets that are being leased and, thus, yield a defined revenue.
  5. It is permitted for the owner of a sukuk certificate to sell it on the secondary market to any buyer at a price agreed upon between them. It doesn’t matter if the price is the same as, less than, or more than the price at which it was bought. That is in consideration of the fact that the value of assets is subject to the market factors of supply and demand.
  6. The owner of a sukuk certificate has a right to his share of the revenue―i.e., the rent―at the times stipulated as terms for the sukuk when they were issued, minus those expenses for which the lessor is responsible related to the upkeep of the property and other obligations entailed by the leasing contract.
  7. A renter who has the right to sublet is permitted to issue rental sukuk that represent the ownership of the usufruct that he/she took possession of by the lease contract with the intention of subleasing. The condition for that is that the sukuk be issued before the contracts are signed with the [sublet] lessees. It makes no difference if the rent for the secondary leases is the same as, less than, or more than the rent for the original lease. However, if leases have already been signed with the second-tier lessees, then it is not permitted to issue sukuk because they would now represent debts owed by the lessees to the sukuk issuer.
  8. It is not permitted for the issuer or administrator of the sukuk to guarantee the value of the sukuk certificate itself or the revenue; and if the leased assets should be damaged or destroyed, it is the sukuk certificate holders who will bear the loss.

The Academy also suggests the following:

A forum should be convened specifically for the study of the rules applicable to specific applications mentioned in some of the research papers [presented to the Academy], about which this resolution has not delivered any judgment. That should occur in coordination with the concerned financial institutions. The Academy will then be able to issue judgments about those applications on the basis of the conclusions arrived at in the forum. The most important unresolved issues are:

  1. The rule on issuing sukuk for the ownership of assets being rented by leases that will terminate in a transfer of ownership back to the one from whom they were purchased.
  2. The rule on issuing and trading sukuk for forward ijarah leases.

 

قرار رقم 137 (3/15)بشأن صكوك الإجارة

 

إن مجلس مجمع الفقه الإسلامي الدولي المنبثق عن منظمة المؤتمر الإسلامي المنعقد في دورته الخامسة عشرة بمسقط ( سلطنة عُمان ) 14 – 19 المحرم 1425هـ، الموافق 6 – 11 آذار ( مارس ) 2004م.

بعد اطلاعه على البحوث الواردة إلى المجمع بخصوص موضوع صكوك الإجارة، وبعد استماعه إلى المناقشات التي دارت حوله،

قرر ما يأتي:

1. تقوم فكرة صكوك الإجارة على مبدأ التصكيك ( أو التسنيد أو التوريق ) الذي يقصد به إصدار أوراق مالية قابلة للتداول، مبنية على مشروع استثماري يدرّ دخلاً. والغرض من صكوك الإجارة تحويل الأعيان والمنافع التي يتعلق بها عقد الإجارة إلى أوراق مالية ( صكوك ) يمكن أن تجري عليها عمليات التبادل في سوق ثانوية. وعلى ذلك عُرّفت بأنها ” سندات ذات قيمة متساوية، تمثل حصصاً شائعةً في ملكية أعيان أو منافع ذات دخل “.

2. لا يمثل صك الإجارة مبلغاً محدداً من النقود، ولا هو دين على جهة معنية – سواء أكانت شخصية طبيعية أم اعتبارية – وإنما هو ورقة مالية تمثل جزءاً شائعاً ( سهماً ) من ملكية عين استعمالية، كعقار أو طائرة أو باخرة، أو مجموعة من الأعيان الاستعمالية – المتماثلة أو المتباينة – إذا كانت مؤجرة، تدرُّ عائداً محدداً بعقد الإجارة.

3. يمكن لصكوك الإجارة أن تكون اسمية، بمعنى أنها تحمل اسم حامل الصك، ويتم انتقال ملكيتها بالقيد في سجل معين، أو بكتابة اسم حاملها الجديد عليها، كلما تغيرت ملكيتها، كما يمكن أن تكون سندات لحاملها، بحيث تنتقل الملكية فيها بالتسليم.

4. يجوز إصدار صكوك تُمثل ملكية الأعيان المؤجرة وتداولها – إذا توافرت فيها شروط الأعيان التي يصح أن تكون محلاً لعقد الإجارة – كعقار وطائرة وباخرة ونحو ذلك، ما دام الصك يمثل ملكية أعيان حقيقية مؤجرة، من شأنها أن تدرَّ عائداً معلوماً.

5. يجوز لمالك الصك – أو الصكوك – بيعها في السوق الثانوية لأي مشتر، بالثمن الذي يتفقان عليه، سواء كان مساوياً أم أقل أم أكثر من الثمن الذي اشترى به، وذلك نظراً لخضوع أثمان الأعيان لعوامل السوق ( العرض والطلب ).

6. يستحق مالكُ الصك حصته من العائد – وهو الأجرة – في الآجال المحددة في شروط الإصدار منقوصاً منها ما يترتب على المؤجر من نفقة ومؤنة، على وفق أحكام عقد الإجارة.

7. يجوز للمستأجر الذي له حق الإجارة من الباطن أن يصدر صكوك إجارة تمثل حصصاً شائعةً في المنافع التي ملكها بالاستئجار بقصد إجارتها من الباطن، ويشترط لجواز ذلك أن يتم إصدار الصكوك قبل إبرام العقود مع المستأجرين، سواء تم الإيجار بمثل أجرة الإجارة الأولى أو أقل منها أو أكثر. أما إذا أُبرمت العقود مع المستأجرين، فلا يجوز إصدار الصكوك، لأنها تمثِّل ديوناً للمُصدر على المستأجرين.

8. لا يجوز أن يضمن مصدر الصكوك أو مديرها أصل قيمة الصك أو عائده، وإذا هلكت الأعيان المؤجرة كلياً أو جزئياً فإن غرمها على حملة الصكوك.

ويوصي بما يأتي:

عقد ندوة متخصصة لدراسة الحكم في الصور التطبيقية التي اشتملت عليها بعض البحوث، ولم يتضمن هذا القرار حكماً لها، وذلك بالتنسيق مع المؤسسات المالية المعنية، ليصدر المجمع قراره فيها في ضوء نتائج تلك الندوة. ومن أبرز تلك الصور:

1. الحكم في إصدار صكوك بملكية الأعيان المؤجرة إجارة منتهية بالتمليك على من اشتريت منه تلك الأعيان.

2. حكم إصدار الصكوك وتداولها في إجارة الموصوف في الذمة.

 

والله أعلم

 http://www.isra.my/fatwas/investment-banking/modes-of-sukuks/63-resolution-no-137-153-issued-by-the-international-council-of-fiqh-academy-regarding-sukuk-al-ijarah.html

Sukuk Al Ijarah

Sukuk Al Ijarah is an Islamic bond where in which the issuance is backed by the buying, selling, and leasing of properties.

Example of Sukuk Ijarah Structure:  http://al-sukuk.com/Finance%20islamique/FIPROD/FIPROD_Sukuk.html

Sukuk Certificates of equal value are issued by the owner of a leased asset or a tangible asset to be leased by promise.  The certificates can also be issued by a financial intermediary acting on behalf of the owner with the intent of selling the asset and recovering its value through subscription with the result that the holders of the Sukuk certificates become owners of the assets.

Certificates of Ownership of Usufructs of Existing Assets

  1. Certificates of equal value issued by the owner of an existing asset either on her own or though a financial intermediary with the goal of leasing the asset and then receiving the rental income from the revenue of the subscription so that the usufruct of the assets passes into the ownership of the holder(s) of the certificate(s).
  2. Certificates of equal value issued by the owner of the usufruct of an existing asset (lessee) either on her own or through a financial intermediary with the goal of sub-leasing the usufruct and receiving the rental income from the revenue of the subscription so that the holder(s) of the certificates become the owners of the usufruct asset.

Certificates of Ownership of Usufructs of Described Future Assets

  1. These are certificates of equal value issued for the purpose of leasing out tangible future assets and for collecting the rental income from the subscription revenue so that the usufruct of the described future asset passes into the ownership of the holders of the certificates.

Certificates of Ownership of Services of a Specified Party

  1. These are certificates of equal value issued for the purposes of providing services through a specified provider and obtaining service charges in the form of subscription income so that the holders of the certificates become owners of these services.

Certificate of Ownership of Described Future Services

  1. These are certificates of equal value issued for the purpose of providing future services through described provider and obtaining the fee in the form of subscription income so that the holders of the certificates become owners of the services.

Key Points

  • A promise by the originator to purchase back the leased asset at par value either at the maturity date or in the event of default.
  • The rental is floating based on LIBOR Benchmark.
  • The insurance cost is borne by the Sukuk investor, but to be set off against the selling price under the promise to purchase back.
  • In most cases of Sukuk Al Ijarah, (which are asset-based), the transfer of title to the SPV/Issuer/ Trustee is based on beneficial ownership transfer not legal ownership transfer.

Information taken from materials handed out at the Amanie Islamic Finance School Workshop in Dubai, UAE on December 14-15, 2008 and www.bruneiresources.com.

LINK TO CASE STUDY:  http://www.kantakji.com/fiqh/Files/Finance/N263.pdf

Interesting Articles —

http://www.middleeastforex.com/news/articles/28/Nomura-to-Issue-$100-Million-Sukuk-Al-Ijarah.html

http://www.bruneiresources.com/pdf/sukuk.pdf

UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance