Authorities in Uzbekistan are advancing legislative measures to permit the issuance of sukuk, which are financial instruments structured around Islamic financing principles. This initiative is embedded within the draft law "On the Capital Market," having successfully cleared its first reading in the Legislative Chamber of the Oliy Majlis and currently undergoing preparations for the second reading.

Representatives from the National Agency of Prospective Projects (NAPP) outlined that the proposed legal framework will encompass four distinct categories of sukuk: partnership, leasing, trading, and agency instruments. Unlike traditional corporate bonds, the financial return on sukuk is derived directly from underlying tangible assets or specific business operations, while strictly prohibiting involvement in prohibited sectors such as alcohol production or conventional interest-bearing loans. *

To maintain strict adherence to Islamic financial standards, the draft legislation mandates the establishment of specialized Sharia boards. These advisory bodies, potentially operating under the Central Bank, will evaluate and monitor the compliance of issuances throughout their lifecycle. During an anticipated transition period, recognitions from established international standard-setting organizations such as AAOIFI and IFSB may also be utilized.

Investor protection mechanisms constitute a core pillar of the proposed bill, featuring asset segregation through dedicated financial vehicles and the introduction of a dedicated representative for sukukholders. These measures are ostensibly designed to bolster market confidence and attract institutional and private investors who have historically abstained from conventional financial products due to religious or ethical convictions.

Source: podrobno.uz