Participatory Finance: Government Council Adopts Two Bills On Sukuk and Takaful

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Rabat – The government council has reviewed and adopted two draft decrees regarding participatory finance, namely Sukuk and Takaful.

The decrees in question, Sukuk, Sharia-compliant investment certificates, and Takaful, participatory insurance, were presented by Mohamed Boussaid, Minister of Economy and Finance, on Thursday in Rabat.

During a press conference held after the government council meeting, government spokesman Mustapha El Khalfi stated that the council had adopted the sukuk bill supplementing decree 2.08.530 of June 30, 2010 implementing Law 33.06 on the securitization of assets, with a view to putting its entry into force.

The first project on asset securitization stipulates, by virtue of a decision of the governmental authority in charge of finance with the assent of the Superior Council of the Oulema, the technical characteristics of the sukuk certificates intended to be placed with local investors and the terms of their issue.

The second Takaful bill applies articles 10-5 and 248-1 of of the Insurance Code Act. This text empowers the governmental authority in charge of finance to lay down the specific implementing provisions relating to the “Takaful” insurance contract as well as the terms and conditions of the operations of this type of insurance.

It also empowers Boussaid’s department to set the criteria and terms of remuneration of the insurance and reinsurance undertaking for the management of the Takaful account, as well as the arrangements for distributing technical and financial surpluses between participants in the Takaful operations.

Boussaid stated that the effective launching of participatory banks in the Moroccan financial sector will allow diversification of sources of financing, stimulating the collection of financial savings, particularly that of households, and promoting investment.

Legislative work to start participatory banks began years ago, following the adoption of the law on credit institutions and related bodies in 2014.

In 2016, a favorable opinion was delivered by a committee bringing together the Ministry of Economy and Finance and Bank al Maghrib, giving rise to the approval of five Moroccan banks to carry out participatory banking activities in partnership with Gulf banks.