posted by Christopher Holton

The Islamic Financial Services Board (IFSB) is seeking to establish some clarity in the murky world of regulation of Shariah-compliant bonds, also known as sukuk.

The bone of contention centers around whether sukuk are indeed compliant with shariah and what role national laws and regulations play.

Such issues have gained prominence over the past year after a company in the United Arab Emirates stopped payments on a $700 million sukuk, arguing the transaction no longer complied with Islamic principles.

That triggered a legal dispute in both the English and UAE courts.

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