Back to the complete issue
Tuesday, 16 March 2021

House mulls changes to Sovereign Sukuk Act

Egypt to exempt sovereign sukuk from local regulatory oversight: A state-owned special purpose vehicle (SPV) that would be set up under the Sovereign Sukuk Act to manage the government’s sukuk sales may not be subject to oversight from the Financial Supervisory Authority if an amendment to a proposed framework governing sovereign sukuk sales passes the House of Representatives, Masrawy reported. The amendment, which was proposed by Finance Minister Mohamed Maait and approved “in principle” by the House Economic Committee on Sunday, would ensure the law treats sovereign sukuk in the same manner Egypt’s legal framework treats other instruments sold by the government, including eurobonds, green bonds, and local treasuries. It implies sovereign sukuk sales, unlike corporate sukuk, wouldn’t require the FRA’s approval, but rather an authorization from parliament.

Why this matters: Egypt’s maiden sovereign sukuk sale is expected soon after the bill makes its way into law. The bill, which received cabinet approval in November, would set up a company to issue sukuk on behalf of the government, govern how the debt is securitized and traded, and lay out the rights and responsibilities of sukuk holders — making sovereign sukuk a legal reality. The bill is currently being discussed by MPs at committee-level, a process after which it should make its way to a final general assembly vote.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.