Box Story 3: Singapore Dollar Sukuk Facility
MAS announced in May 2008 our intention to develop a facility to issue Sukuk on a reverse-enquiry basis. This facility was successfully launched on 19 January 2009 and was jointly arranged by the Islamic Bank of Asia and Standard Chartered Bank, whose Shariah boards certified the facility's compliance with Shariah principles. MAS will issue the Sukuk according to the capital and liquidity requirements of financial institutions in Singapore which offer or plan to offer Shariah-compliant financial services. The Sukuk will be priced against the liquid Singapore Government Securities (SGS) market, which provides a transparent price discovery mechanism for the new security.
The Sukuk facility underscores Singapore's commitment to put in place the necessary frameworks and infrastructure to support the development of Islamic finance in Singapore. The expansion of Shariah-compliant activities in Singapore is likely to attract both Muslim and non-Muslim investors who are interested in ethical investing, and therefore diversify financial institutions' sources of funding and deepen the investor base.