Disclosure and transparency requirements in issuing sukuk with a comparative study of Islamic countries

Sukuk, an Islamic investment instrument rooted in the Arabic word for certificate, signifies an ownership stake in underlying assets. Their structure adheres to Sharia principles, eschewing interest payments in favor of asset-based financing. Sukuk has emerged as a cornerstone of Islamic financing, attracting investors seeking Sharia-compliant investment avenues. Sukuk as Islamic financial instruments have gained traction in global financial markets as a viable alternative to conventional bonds. Issuing sukuk mandates adherence to Sharia principles, emphasizing ethical and transparent financial transactions. This article delves into the disclosure and transparency requirements associated with sukuk issuance across diverse Islamic countries, conducting comparative analyses to identify best practices and potential areas for improvement. This article outlines the disclosure and transparency requirements for sukuk issuance in seven countries: Indonesia, Saudi Arabia, Singapore, Qatar, Kuwait, Malaysia, and Iran. The comparative elements of this article encompass the nature of sukuk structure disclosure, disclosure of underlying assets, sukuk-related risk disclosure, investment return disclosure, cost and expense disclosure, annual financial statement disclosure, and sukuk trading platform disclosure. For each attribute, the article categorizes the disclosure and transparency requirements as comprehensive, moderate, or least stringent. Malaysia boasts the most comprehensive and stringent set of disclosure and transparency requirements for sukuk issuers, followed by Indonesia and Singapore. Saudi Arabia, Qatar, and Kuwait exhibit moderate requirements, while Iran s requirements are the least stringent. This information holds significance for investor protection, ensuring that investors have access to all necessary information to make informed investment decisions. Disclosure and transparency further promote market liquidity and price discovery.