Critical Factors for Stimulating Private Sector Sukuk Markets

Institutional Investor, Forthcoming

11 Pages Posted: 6 Apr 2016 Last revised: 12 May 2016

See all articles by Michael J. T. McMillen

Michael J. T. McMillen

Curtis, Mallet-Prevost, Colt & Mosle LLP; University of Pennsylvania Law School

Date Written: April 3, 2016


Sukuk issuances remain the most rapidly growing area of Islamic finance, a trend that shows no signs of abating in the near future. True private sector sukuk issuances - particularly rated issuances - and those outside the financial services (particularly the banking) area - are rare. Those that exist are largely issuances by sovereign-controlled entities or are otherwise dependent upon sovereign credits somewhere in the structure. This paper identifies certain categories of factors that inhibit these private sector issuances. The factors discussed are (a) bankruptcy and insolvency issues, particularly pertaining to the use of special purpose entities, true sales, and substantive consolidation, (b) collateral security issues, and (c) systemic legal structures, processes and procedures. Suggestions are made for both longer-term reforms and, more immediately, reorientation of the private sector issuance process.

Keywords: Sukuk, Shariah, Securitization, Bankruptcy, Insolvency, Collateral Security

JEL Classification: F15, F34, G32, K10, K19, K22, K33

Suggested Citation

McMillen, Michael J. T., Critical Factors for Stimulating Private Sector Sukuk Markets (April 3, 2016). Institutional Investor, Forthcoming, Available at SSRN:

Michael J. T. McMillen (Contact Author)

Curtis, Mallet-Prevost, Colt & Mosle LLP ( email )

101 Park Avenue
35th Floor
New York, NY 10178-0016
United States
+1-212-696-6157 (Phone)

University of Pennsylvania Law School ( email )

3400 Chestnut Street
Philadelphia, PA 19104-6204
United States
1-610-865-1295 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics