The Philippine Securities and Exchange Commission has released a second exposure draft of proposed Guidelines on the Issuance and Disclosure of Sukuk, reopening the draft memorandum circular for another round of public comment. The draft would set a Philippines-specific regulatory framework for sukuk issuances focused on disclosure, Shari’ah compliance, and investor protection. The proposed framework would apply to sukuk issuances that are not exempt under the Securities Regulation Code, with sukuk intended for public offering to be registered with the SEC and eligible for listing and trading on an SEC-registered fixed-income exchange or other registered organized market. Permitted structures include Ijarah, Murabahah, Istisna, Wakalah bil Istithmar, Mudarabah and Musharakah, while prohibiting elements such as riba, gambling, excessive uncertainty, corruption and non-permissible activities. Eligible issuers include SEC-registered special purpose entities, publicly listed companies and non-listed stock corporations, while the national government, local government units, government-owned and controlled corporations and Bangko Sentral ng Pilipinas-supervised banks (including Islamic banks) would be exempt from registration but required to notify the SEC and submit disclosures, with banks also required to submit BSP clearance. Disclosure proposals go beyond SEC Form 12-1 to include detailed structure and transaction-flow information, summaries of principal contracts, independent valuation of underlying assets using at least two valuation methods unless justified, Shari’ah certification and monitoring arrangements, disclosures on purification payments and other Shari’ah-related payments, and detailed risk, asset ownership and trustee information. Continuing obligations would include filing SEC Form 17-C within five days of specified events, such as Shari’ah-relevant contract amendments, material changes in underlying assets, credit rating updates and new fatwa, alongside trust deed, Shari’ah governance and public-offer credit rating requirements. Non-payment of sukuk principal or profit on the due date would constitute an event of default without a materiality threshold, with any remedy period capped at seven business days. Written comments are requested on or before 12 December 2025. The exposure draft also provides that the circular would take effect 15 days after publication in two newspapers of general circulation and posting on the SEC website.

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