The Securities and Exchange Commission (SEC) has released a comprehensive regulatory framework for sukuk, or Islamic bonds, as part of a push to deepen the country’s Islamic capital market and attract global and domestic investors.
According to SEC memorandum circular No. 12, issued on Feb. 25, the commission established formal guidelines for the issuance, registration, and disclosure of Shari’ah-compliant certificates. These instruments represent undivided ownership interests in underlying assets or projects rather than traditional debt.
SEC chairperson Francis Lim described sukuk as a strategic tool for raising capital locally and internationally, noting that the framework aligns with the government’s broader goals of financial inclusion and economic growth.
The guidelines allow for various Shari’ah-compliant models, including hybrid structures and other SEC-approved frameworks. Issuers must appoint a Shari’ah advisor or establish an independent Shari’ah committee, operating independently of the board, to certify compliance throughout the sukuk lifecycle.
Special purpose entities (SPEs) may be incorporated for sukuk issuances, provided they are registered separately and comply with international standards and the Revised Corporation Code.
Eligible issuers include publicly listed and non-listed companies, while the national government, state agencies, and Bangko Sentral-supervised banks may issue sukuk but remain exempt from registration under the Securities Regulation Code.
To protect investors, public offerings must include detailed documentation of the sukuk structure, transaction flows, and the obligations of the SPE and obligor. All issuances must be backed by a trust deed and obtain a credit rating from an SEC-accredited or international agency.
The SEC clarified that while registration provides a regulatory path, listing, trading, and settlement of sukuk remain subject to the rules of the relevant exchange or organized market.
