BB sets new Sukuk rules

Bangladesh Bank (BB) has set new rules for allocating Sukuk among different types of investors and issued a circular in this regard on Monday.
Under the new rules, Shariah-based banks, financial institutions and insurance companies will get 50% of the Sukuk. Islamic branches and windows of conventional banks will get 30%, while individual investors will get 10% and the remaining 10% will be allocated to other institutional investors.
The BB’s Debt Management Department issued the circular, and the new rules came into effect on the same day.
The central bank said that if investors in any category submit bids above their allocated share, Sukuk will be distributed among them based on the size of their bids.
If a category receives fewer bids than its allocated share, the remaining Sukuk will be allocated to other categories that receive bids above their respective shares. The additional Sukuk will also be distributed according to the size of their bids.
Other institutional investors include conventional banks, financial and insurance companies, provident funds, deposit insurance funds, investment companies, corporate institutions, gratuity funds and mutual funds.
If total bids are lower than the amount of Sukuk being issued, the remaining Sukuk will be managed by the Special Purpose Vehicle (SPV).