The Jordanian Legislation and Opinion Bureau published the first draft of the Sukuk Islamic Financing Law of 2011 (draft law) on 14th April. In order to come into force, the draft law requires the approval of both the cabinet and parliament, and it is still too early to anticipate whether or not the draft law shall be passed.
The draft law, if passed, shall regulate for the first time the issuance of sukuk in all its forms and types; thereby removing much of the uncertainty surrounding the proper mechanisms for making use of Shariah compliant financing instruments in Jordan.
Under the draft law, sukuk is defined as (rough translation): ‘Documents of equal value representing common shares in the ownership of the project, registered as a book entry and issued in the names of its owners in consideration of monies which they provided for the execution and utilisation of the project, in order to achieve returns for the period specified in the prospectus.’
The draft law makes it clear that the definition of sukuk is wide enough to include all types and forms of Islamic financing, including ijarah, mudarabah, muqaradah, murabahah, musharakah, al-sillam, istisnah, the sale of benefit/use, and/or any other sukuk permitted by the High Central Shariah Commission.