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Thursday, 19 August 2021

Sovereign Sukuk Act signed into law

The long-awaited Sovereign Sukuk Act is now law of the land, paving the way for the issuance of our maiden sharia-compliant bonds on local and international debt markets. President Abdel Fattah El Sisi has signed off on the bill, according to the Official Gazette (pdf).

The government is eager to get the ball rolling, with the Finance Ministry previously saying that it would start working on its first issuance as soon as the legislation takes effect when the executive regulations of the bill, which received its final rubber stamp from the House in June, are published within three months at most. The exact timing and size of the planned offering remains unknown.

The bill defines the different types of sukuk, which include ijara, mudaraba, istisnaa, murabaha and wakala sukuk. It will also set a term limit of 30 years on all sovereign sukuk and establish the Sovereign Sukuk Company, a joint stock company to execute and manage sales. The act’s executive regulations will cover setting up a regulatory oversight committee, clarifying how disputes between the government and sukuk holders should be handled, and will form an association to protect the rights of investors.

But Enterprise, what are sukuk? We’ve got you covered with this explainer.

Other laws greenlit by El Sisi:

  • Amendments giving the Supreme Constitutional Court (SCC) authority over international rulings. The changes give the court power to effectively overturn the local implementation of international court rulings if they violate the constitution, at the request of the prime minister.
  • A law to set up an emergency medical response fund that will replace the current system of disparate family health centers around the country, providing financial support during major emergencies.
  • Amendments obliging cotton ginners to record the quantity and quality of their cotton supplies and make records available to the Cotton Arbitration and Testing General Organization. Those who are in violation may have their supplies seized, and could face up to six months in jail, or pay a fine ranging from EGP 100k to EGP 1 mn.
  • Amendments to the penal code handing people found guilty of [redacted] harassment tougher penalties including minimum five-year prison terms and fines worth EGP 200k-300k. Minimum seven-year jail sentences will be handed to people who collaborate with others, use weapons or have professional or personal authority over the victim.

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