Complying with the requirements for issuance of SRI sukuk: the case of Khazanah’s Sukuk Ihsan

Purpose – The purpose of this study is to provide a critical review on how the Khazanah’s Sukuk Ihsan was structured in compliance with the requirements for issuance of Sustainable and Responsible Investment (SRI) sukuk set by the Securities Commission (SC) Malaysia. Design/methodology/approach –...

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Main Authors:	Noordin, Nazrul Hazizi, Haron, Siti Nurah, Hasan, Aznan, Hassan, Rusni
Format:	Article
Language:	English English English
Published:	Emerald Group Publishing Ltd. 2018
Subjects:	BP173.44 Human Rights In Islam KBP Islamic Law
Online Access:	http://irep.iium.edu.my/65490/ http://irep.iium.edu.my/65490/ http://irep.iium.edu.my/65490/ http://irep.iium.edu.my/65490/1/65490_Complying%20with%20the%20requirements_article.pdf http://irep.iium.edu.my/65490/2/65490_Complying%20with%20the%20requirements_scopus.pdf http://irep.iium.edu.my/65490/13/65490_Complying%20with%20the%20requirements%20for%20issuance%20of%20SRI%20sukuk%20the%20case%20of%20Khazanah%E2%80%99s%20Sukuk%20Ihsan_WOS.pdf

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spelling	iium-654902019-01-24T02:21:26Z http://irep.iium.edu.my/65490/ Complying with the requirements for issuance of SRI sukuk: the case of Khazanah’s Sukuk Ihsan Noordin, Nazrul Hazizi Haron, Siti Nurah Hasan, Aznan Hassan, Rusni BP173.44 Human Rights In Islam KBP Islamic Law Purpose – The purpose of this study is to provide a critical review on how the Khazanah’s Sukuk Ihsan was structured in compliance with the requirements for issuance of Sustainable and Responsible Investment (SRI) sukuk set by the Securities Commission (SC) Malaysia. Design/methodology/approach – To explain the structures and features of the Sukuk Ihsan, this study extracted important information from the sukuk’s Principle Terms and Conditions and Information Memorandum and presented them in a simple and easy-to-understand way. Next, this study refers to Part D: Requirement for Issuance, Offering or Invitation to Subscribe or Purchase Sustainable and Responsible Investment Sukuk of the SC’s Guidelines on Sukuk (revised edition: 28 August 2014) to assess the compliance of the sukuk in terms of eligibility of SRI sukuk issuer and SRI projects, use of proceeds, reporting and disclosure and independent assessment on SRI programmes. In addition, this study then compares the requirements stated in the SC’s SRI Sukuk Framework with the International Capital Market Association’s Green Bond Principles (GBP) and the USA’s Social Impact Bond (SIB) Act 2014. Findings – The present study finds that the definition of eligible SRI sukuk issuer in the Guidelines on Sukuk seems to be more stringent compared to the one provided in the GBP and the US’ SIB Act. Nevertheless, the SRI Sukuk Framework provides a more comprehensive yet precise list of eligible SRI projects, covering both environmental and social aspects, compared to the GBP (which only focuses on broad categories of environmental projects) and also the USA’s SIB Act (explicitly outlines 13 social projects which are aligned with the US Federal Government’s agenda in tackling social illnesses). Indeed, the main difference between the eligible SRI sukuk projects and its conventional counterparts lies in its compliance to Shariah principles. It is also observed that a significant emphasis has been given on SRI legislations in ensuring proper reporting and disclosure provided to the SRI sukuk stakeholders together with critical evaluation on the impacts of SRI programmes provided by an independent assessor. Practical implications – This paper contributes towards enriching the literature on the Islamic capital market, particularly on the integration between sukuk and social impacts investing. This paper was intended to highlight the important requirements in issuing SRI sukuk to various stakeholders of the Islamic capital market. Originality/value – The authors hope to shed some lights on the unique features and structural applications of SRI sukuk and its importance in becoming an effective instrument to raise funds for social agenda of a country by providing a real and practical example. Emerald Group Publishing Ltd. 2018 Article NonPeerReviewed application/pdf en http://irep.iium.edu.my/65490/1/65490_Complying%20with%20the%20requirements_article.pdf application/pdf en http://irep.iium.edu.my/65490/2/65490_Complying%20with%20the%20requirements_scopus.pdf application/pdf en http://irep.iium.edu.my/65490/13/65490_Complying%20with%20the%20requirements%20for%20issuance%20of%20SRI%20sukuk%20the%20case%20of%20Khazanah%E2%80%99s%20Sukuk%20Ihsan_WOS.pdf Noordin, Nazrul Hazizi and Haron, Siti Nurah and Hasan, Aznan and Hassan, Rusni (2018) Complying with the requirements for issuance of SRI sukuk: the case of Khazanah’s Sukuk Ihsan. Journal of Islamic Accounting and Business Research, 9 (3). pp. 415-433. ISSN 1759-0817 E-ISSN 1759-0825 https://www.emeraldinsight.com/doi/full/10.1108/JIABR-02-2016-0024 10.1108/JIABR-02-2016-0024
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English English English
topic	BP173.44 Human Rights In Islam KBP Islamic Law
spellingShingle	BP173.44 Human Rights In Islam KBP Islamic Law Noordin, Nazrul Hazizi Haron, Siti Nurah Hasan, Aznan Hassan, Rusni Complying with the requirements for issuance of SRI sukuk: the case of Khazanah’s Sukuk Ihsan
description	Purpose – The purpose of this study is to provide a critical review on how the Khazanah’s Sukuk Ihsan was structured in compliance with the requirements for issuance of Sustainable and Responsible Investment (SRI) sukuk set by the Securities Commission (SC) Malaysia. Design/methodology/approach – To explain the structures and features of the Sukuk Ihsan, this study extracted important information from the sukuk’s Principle Terms and Conditions and Information Memorandum and presented them in a simple and easy-to-understand way. Next, this study refers to Part D: Requirement for Issuance, Offering or Invitation to Subscribe or Purchase Sustainable and Responsible Investment Sukuk of the SC’s Guidelines on Sukuk (revised edition: 28 August 2014) to assess the compliance of the sukuk in terms of eligibility of SRI sukuk issuer and SRI projects, use of proceeds, reporting and disclosure and independent assessment on SRI programmes. In addition, this study then compares the requirements stated in the SC’s SRI Sukuk Framework with the International Capital Market Association’s Green Bond Principles (GBP) and the USA’s Social Impact Bond (SIB) Act 2014. Findings – The present study finds that the definition of eligible SRI sukuk issuer in the Guidelines on Sukuk seems to be more stringent compared to the one provided in the GBP and the US’ SIB Act. Nevertheless, the SRI Sukuk Framework provides a more comprehensive yet precise list of eligible SRI projects, covering both environmental and social aspects, compared to the GBP (which only focuses on broad categories of environmental projects) and also the USA’s SIB Act (explicitly outlines 13 social projects which are aligned with the US Federal Government’s agenda in tackling social illnesses). Indeed, the main difference between the eligible SRI sukuk projects and its conventional counterparts lies in its compliance to Shariah principles. It is also observed that a significant emphasis has been given on SRI legislations in ensuring proper reporting and disclosure provided to the SRI sukuk stakeholders together with critical evaluation on the impacts of SRI programmes provided by an independent assessor. Practical implications – This paper contributes towards enriching the literature on the Islamic capital market, particularly on the integration between sukuk and social impacts investing. This paper was intended to highlight the important requirements in issuing SRI sukuk to various stakeholders of the Islamic capital market. Originality/value – The authors hope to shed some lights on the unique features and structural applications of SRI sukuk and its importance in becoming an effective instrument to raise funds for social agenda of a country by providing a real and practical example.
format	Article
author	Noordin, Nazrul Hazizi Haron, Siti Nurah Hasan, Aznan Hassan, Rusni
author_facet	Noordin, Nazrul Hazizi Haron, Siti Nurah Hasan, Aznan Hassan, Rusni
author_sort	Noordin, Nazrul Hazizi
title	Complying with the requirements for issuance of SRI sukuk: the case of Khazanah’s Sukuk Ihsan
title_short	Complying with the requirements for issuance of SRI sukuk: the case of Khazanah’s Sukuk Ihsan
title_full	Complying with the requirements for issuance of SRI sukuk: the case of Khazanah’s Sukuk Ihsan
title_fullStr	Complying with the requirements for issuance of SRI sukuk: the case of Khazanah’s Sukuk Ihsan
title_full_unstemmed	Complying with the requirements for issuance of SRI sukuk: the case of Khazanah’s Sukuk Ihsan
title_sort	complying with the requirements for issuance of sri sukuk: the case of khazanah’s sukuk ihsan
publisher	Emerald Group Publishing Ltd.
publishDate	2018
url	http://irep.iium.edu.my/65490/ http://irep.iium.edu.my/65490/ http://irep.iium.edu.my/65490/ http://irep.iium.edu.my/65490/1/65490_Complying%20with%20the%20requirements_article.pdf http://irep.iium.edu.my/65490/2/65490_Complying%20with%20the%20requirements_scopus.pdf http://irep.iium.edu.my/65490/13/65490_Complying%20with%20the%20requirements%20for%20issuance%20of%20SRI%20sukuk%20the%20case%20of%20Khazanah%E2%80%99s%20Sukuk%20Ihsan_WOS.pdf
first_indexed	2023-09-18T21:32:56Z
last_indexed	2023-09-18T21:32:56Z
_version_	1777412631190044672

Complying with the requirements for issuance of SRI sukuk: the case of Khazanah’s Sukuk Ihsan

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