ABU DHABI: A new set of regulations for the bonds and sukuk market that it has cut the minimum value of issuance from Dh50 million to Dh10 million, the bond market regulator said on Monday.

The regulations, which were issued by the Securities and Commodities Authority (SCA), include a shortened approval time of five days, and the removal of the requirement to obtain a credit rating.

Additionally, bond issuers are no longer required to provide a quarterly report as they may only provide an audited annual financial statement within 180 days of the year-end. The regulator has also introduced the Debt Securities Issuance Program to allow for fast track process for seasoned issuers.

The new set of regulations aims to give momentum to the market, and strengthen the UAE’s role as a financial hub for global Islamic economy.

However, the regulations do not apply to government entities and companies wholly owned by the government.

Discussing the new regulations, Dr Mounther Barakat, senior studies and research adviser at SCA, said a board looked at international best practices in order to apply them to the new regulations.

Meanwhile, Sebastien Henin, head of asset management at The National Investor, said the new regulations would encourage more issuers to list in the UAE rather than look at international markets.

“[The regulations] will provide more flexibility for the issuers. At the same time, more companies will rely on [the reduced minimum value], so it’s something very interesting, which was expected by many market operators. It will definitely have a positive impact on the sukuk market,” he said.

Given the market performance, the new regulations make the environment an even better one to issue bonds, Henin added.

“We have seen that the UAE has been in the recovery mode for the past two years. Some companies now have investment projects, and in order to finance them, they can benefit from historic low rates. I wouldn’t be surprised to see more issuance in the coming months and quarters,” he said.

The total size of bond and sukuk issuances in the UAE during the first half of this year exceeded Dh44.2 billion, accounting for almost 55 per cent of the total issuances in the Middle East, according to a report by Reuters.

There are currently three corporate bond issues on the Dubai Financial Market, and eight corporate bond issues on Nasdaq Dubai.