Egypt's sukuk law to be replaced with chapter in existing securities law: EFSA

Ahram Online, Monday 13 Jan 2014

Islamic bonds will be treated as other securities and regulated accordingly, a move which does away with a sukuk law passed by ousted president Mohamed Morsi last year

(Photo: Reuters)

Egyptian Financial Supervisory Authority (EFSA) plans to replace the current sukuk law with a chapter in the securities law, EFSA spokesperson Sobhy Shehata told Ahram Online on Monday.

Shehata explained that since sukuk – Islamic bonds – are another type of securities, they do not need a law on their own and will thus be included in the executive regulations of the existing securities law.

EFSA announced late last week that it would introduce some amendments to the sukuk law that was issued last May by ousted president Mohamed Morsi.

"This law is too focused on government institutions, whereas securities are mainly issued by companies and corporations in the form of shares and bonds," EFSA head Sherif Samy said on Friday in a phone interview with a private satellite channel.

Samy clarified that EFSA's role is supervising the non-banking financial sector which includes capital and debt markets, but that it does not have any legislative powers.

"Although we do not have the authority to annul laws, we can however add chapters to the executive regulations of the existing securities law, but we only do so after the collective consensus of the involved parties," said Shehata.

The sukuk legislation was approved by Morsi's government, but deactivated after his July ouster.

In late November, Deputy Prime Minister Ziad Bahaa El-Din said that the financial instrument could be useful and that the law only needed a few amendments.

"We hope to finalise the sukuk chapter and submit it under the interim government's rule," said Shehata.

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