Prof. Hammad Mustafa Azab
Professor of Commercial Law and Head of Commercial Law Department
Former Dean – Faculty of Law – University of Assiut – Egypt

Abstract:

Islamic Sukuk (financial certificates) play a major role in financing various projects in order to achieve economic and social development in Islamic countries and elsewhere, this is due to the characteristics of this investment instrument compared to other similar traditional financial instruments in the stock market; however, Sukuk cannot play this role without the existence of a comprehensive legal regulation for all stages of the Sukuk process.
The State of Kuwait has shown a great interest in the important role Islamic Sukuk plays by meeting the needs of both the individuals and the State in the presence of a financing instrument that works in accordance with the provisions of Islamic Sharia, to finance development projects. Kuwait’s interest manifested in the issuing of some relevant legislations and working on issuing comprehensive legislation that includes all the provisions of Islamic Sukuk. Recently, the Egyptian legislator has shown interest in Islamic Sukuk, and, in an attempt at keeping pace with other countries, worked on regulating them by issuing Law No. 10 of 2013 on Sukuk. The Egyptian legislator also issued Law No. 17 of 2018 amending some provisions of the Capital Market Law, promulgated by Law No. 95 of 1992, which stipulated the abolition of the previous Sukuk law and authorized the issuance of Sukuk in a name that is compliant with Islamic Shariah, Islamic or Shariah, under certain conditions. In addition, the Council of Ministers issued decree No. 2479 of 2018, on November 24, 2018, amending some provisions of the executive regulations of the Capital Market Law No. 135 of 1993 issued by the Minister of Economy and Foreign Trade, which included some detailed provisions concerning the issuance and negotiability of Sukuk.
This study deals with the legal regulation of Islamic Sukuk and its importance in supporting and activating their role in achieving economic and social development by clarifying, in an preliminary section, the concept of Sukuk, their characteristics, and the similarities and differences between them and other securities. The first section discusses the legal regulation of the types of Sukuk based on the legal contract on which the instrument is issued, and the areas of usage for each type of Sukuk in financing development projects separately. In the second section, the study discusses the general risks that Islamic Sukuk may be exposed to, in a way similar to other securities, and the special risks related to the legal formulation on which it was based and issued. Moreover, it sheds light on means of legal protection of Islamic Sukuk from these risks and the guarantees that support them in fulfilling their role in achieving the desired development.

Keywords: Sukuk, types of Sukuk, the risks of Sukuk, legal protection of Sukuk.

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