Sukuk - On the National Legislation Program

The Draft Bill on State Syariah Commercial Paper (RUU Surat Berharga Syariah Negara / SBSN) is one of the 78 bills on the National Legislation Program (Program Legislasi Nasional / Prolegnas) for 2007. However, if previous legislation form is taken into account it is unlikely that the House of Representatives (DPR) will successfully pass 78 bills this year (see ILB 16/11/2006).

Considering that the financial services sector has been lobbying for this Bill for more than 2 years, the fact that it has only just reached the preliminary discussion phase does not bode well for any expedited passage and enactment through the DPR.

The Bill potentially is an integral part of the Government's investment plans for the future as sukuk, which are essentially asset-backed bonds, will be used to finance national or local development projects. As sukuk are assetbacked it is the intent of the Government that the Government will provide the necessary assets to back any Syariah based bonds issues. The Government has appointed the Minister of Finance to shepherd the Bill through the discussion, debate, passage, and enactment process.