Oman: Consultation on New Bonds and Sukuk Regulation

Oman News developments

Oman: Consultation on New Bonds and Sukuk Regulation

Oman Daily Observer, 1 April 2024: Oman’s Financial Services Authority has announced it has issued a public consultation on a new Bonds and Sukuk Regulation.

If approved, it will regulate the long-term debt market in the Sultanate.

It will offer flexibility in structuring diversified financing products such as Green and Sustainable Bonds and Sukuk and Waqf Sukuk. It will also provide for special types of bonds and Sukuk customised to the financing needs of an investor and an issuer of a security.

These green products will improve green and sustainable financing in line with green and sustainable financing requirements approved by the Authority’s Board of Directors.

It also includes a chapter on disclosure rules, specifically disclosures related to green and sustainable bonds and sukuk. An issuer will have to implement the rules and terms and conditions of these disclosures to improve the integrity of the capital market and encourage conventional investors and those interested in sustainability issues to invest in these securities.
Along with the issuing of the Commercial Companies Law (Oman Sultani Decree No. 18/2019) and the Securities Law (Oman Sultani Decree No. 46/2022), the Bonds and Sukuk Regulation has been proposed to bring the national market into line with the latest global practices and standards.
It will enable debt instruments to be designed to be one of the main financing options to provide an appropriate investment environment and allow additional alternative instruments for local and foreign investors.

It has been proposed in line with three strategic objectives. The first is related to providing resilient and innovative financial instruments. The second is related to issuing flexible legislation and the third is the sustainable usage and investment of resources and natural wealth.

The Regulation has been proposed to encourage innovative and diversified financing products in line with the nature of financing needs of projects.

The Regulation will also allow conventional bonds and Sukuk to be issued.

The Regulation will incentivise Waqf Sukuk to help the development of the Waqf sector, specifically in terms of activating monetary Waqf and development of Waqf institutions, be they civil or charity institutions too.

The aim is to expand the base of subscribers and participants in Waqf activity.

Bonds and Sukuk can be issued in Oman in any convertible currency and the Authority will accept prospectuses in English for private placement.

The Regulations also contain provisions on special purpose companies, financial trusts, Sharia compliance, agents of beneficiaries or issuers, and general meetings.

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Tanya Jain