Abstract

The government of Bangladesh issued the first five years of sovereign Sukuk in late 2020. The introduction of Sukuk into the capital market showed its motivation to increase the issuance more in the country. Currently, there is no structured regulatory framework for Sukuk in Bangladesh which impedes further development of the Sukuk market. Thus, Bangladesh may adopt the best practices of Sukuk regulation like Malaysia. The main objective of this study is to examine whether Bangladesh can learn from Malaysia’s experience in order to establish a sound regulatory structure for Sukuk. This is qualitative research utilizing case studies and uses the exploratory approach to review and analysis the available legal documents regarding the Sukuk structure and issuance in Malaysia and Bangladesh. Even though there are various legal variances supporting the legal and regulatory framework of the two countries, the Malaysian experience can be a suitable regulatory approach to apply in the Bangladesh context with the adaptation of some rules. Relevant Bangladeshi laws such as specific acts for the Islamic capital market and proper guidelines for Sukuk should be amended to ensure smooth issuance of Sukuk in the country. Apart from that, Bangladeshi regulators have established an independent Shariah Supervisory Board at the central level and a favorable tax framework for Sukuk. The study focuses on the Malaysian legal and regulatory framework regarding Sukuk issuance and set out several regulatory requirements for the Bangladeshi capital market. It contributes significantly to the legal and regulatory conceptual framework of many common law countries whose intention is to implement Sukuk.

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