SEC issues Sukuk rules for investors

The Securities and Exchange Commission (SEC) has released new rules on Sukuk issuances in the Philippines, marking another step in the development of the country’s Islamic capital market and widening the range of Shari’ah-compliant investment options for issuers and investors.

The SEC issued Memorandum Circular No. 12, Series of 2026, on Feb. 25, setting out the Guidelines on the Issuance and Disclosure of Sukuk.

Sukuk are certificates of equal value that represent undivided investment, interest in or rights to underlying assets, usufructs, and services, or projects undertaken in accordance with Shari’ah principles.

The new guidelines establish the regulatory framework for Sukuk issuances, including rules on registration, permissible structures, and reporting and disclosure requirements for issuers.

The SEC said the framework is meant to promote transparency, reinforce investor protection, and uphold Shari’ah compliance.

“The SEC recognizes Sukuk as a strategic instrument for capital raising and investment activities, both locally and internationally,” SEC Chairperson Francis Lim said.

“Through these guidelines, the SEC aims to further strengthen the domestic Islamic capital market and encourage broader investor participation. This initiative supports our commitment to the national government’s goal of advancing financial inclusion and driving economic growth,” he added.

Under the guidelines, Sukuk issuances may use Shari’ah-compliant structures, including hybrid structures, as well as other Sukuk structures that the commission may approve in accordance with Shari’ah principles.

To provide guidance and oversight, issuers must either establish a Shari’ah committee or appoint a Shari’ah adviser.

The committee or adviser must operate independently from the issuer’s board of directors and certify that all aspects of the Sukuk transaction are Shari’ah-compliant.

Sukuk intended for public offering must be registered with the commission.

The SEC said listing, trading, and settlement will still depend on compliance with the rules of the relevant exchange or organized market and will not be considered automatic or guaranteed solely because of registration.

The guidelines also allow the creation of special purpose entities, or SPEs, specifically for Sukuk issuances.

These entities must be incorporated and registered separately with the SEC and must comply with commission regulations.

They must also follow international standards for Sukuk issuance and the applicable provisions of Republic Act No. 11232, or the Revised Corporation Code.

Other eligible Sukuk issuers include publicly listed companies and non-listed stock corporations.

The national government, political subdivisions and agencies, government instrumentalities, banks supervised by the Bangko Sentral ng Pilipinas, and SPEs formed by such entities may also issue Sukuk.

However, these issuers are not required to register under MC 12, consistent with exemptions under Republic Act No. 8799, or the Securities Regulation Code, and its implementing rules and regulations.

Apart from a registration statement, Sukuk issuers must disclose the purpose of the issuance, a detailed description of the Sukuk structure and transaction flow, and the roles, responsibilities, and obligations of the SPE and the Sukuk obligor or originator.

These disclosures remain subject to the review and approval of the commission.

All Sukuk issuances must also be backed by a trust deed executed among the issuer, the SPE, and the trustee.

Publicly offered Sukuk must likewise obtain a credit rating from either an SEC-accredited or an international credit rating agency to assess their creditworthiness and risk profile.

The Philippines has been laying the legal groundwork for Islamic finance in recent years, with Republic Act No. 11439, or the Islamic Banking Act, listed by the Bangko Sentral ng Pilipinas among the country’s Islamic banking-related laws.

The SEC’s new rules extend that framework into the capital markets space, potentially opening a new fundraising channel for corporations, financial institutions, and public sector issuers seeking Shari’ah-compliant financing.