I think the premise is wrong. The main objective of Sukuk is to have a tool or instrument which is flexible and tradable. It was badly needed in Islamic finance and was the topic of innovation in Islamic banking in any conference. However, nowadays the emphasis could be to chase petrodollars because it is a window of opportunity but by all means we should not, I repeat, we should not deviate from AAOIFI standards. Otherwise, why then should we have AAOIFI? Are they not meant to standardize the industry and meet international and Shariah requirements to ensure streamlining? Are they not (the standards) developed by Shariah scholars and professionals in accounting and transparency? Why should we defy a concept that we all worked very hard to realize?
JAMIL A K EL JAROUDI
Whether or not the purpose of Sukuk issuers is to capture petrodollars or create an alternate funding source that may be cheaper than conventional finance, issuers should follow AAOIFI standards. The AAOIFI guidelines on Sukuk are the most widely respected and their incorporation provides a level of consistency across Sukuk issues. Were Sukuk issuers to ignore AAOIFI standards, there would be confusion about whether a given Sukuk confirms to the minimum agreed standard for Shariah compliance. The use of AAOIFI standards provides some measure of international standardization in some areas of Islamic finance like Sukuk issuance and promotes greater development of the industry as a whole. If Sukuk issuers begin to issue Sukuk outside of or without following the AAOIFI standards, it would lead to a reversal of the moves toward standardization within the industry. This would be an unfortunate reversal of the development and globalization of Islamic finance. BLAKE GOUD Principal, SharingRisk.Org, US
In order to enhance the transparency in the industry, and to refute any claims of favoritism or “smoke and mirrors”, all Sukuk — regardless of where the issuer is — should follow the same standards. The AAOIFI Shariah standards for Sukuk are widely accepted in the industry and are followed for every Sukuk issued. Although it could be tempting to loosen the requirements to attract a larger amount of potential issuers, it defeats the purpose of growing the industry and enhancing transparency. DR NATALIE SCHOON Head of product management, Bank of London and the Middle East, UK
AAOIFI is the closest thing that the industry has to a semi-regulatory organization. The leading 20 Shariah scholars are on the AAOIFI Shariah board who meet twice a year and create working teams with practitioners to look at issues and challenges facing the industry. AAOIFI recently created a contract certification program that can further strengthen the Sukuk industry. UM Financial as a member of AAOIFI endorses its standards and encourages the industry to grow around its pioneer leadership. OMAR KALAIR President and CEO, UM Financial, Canada
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