The Financial Regulatory Authority (FRA) set the regulatory framework for sukuk issuers who will operate special purpose vehicles (SPVs) that exclusively issue sukuks, the FRA announced yesterday. The framework outlines regulations for licensing and establishing SPVs, whose activities under the framework will be limited to investing on behalf of sukuk holders who get paid on a profit/loss basis rather than a fixed coupon rate. The issuers are permitted to invest only in sectors compliant with sharia law. The framework also regulates sukuk tenors, investment durations, expected return rates, dividend sharing, and the sukuk exchange and return mechanism. The issuer is also responsible for obtaining credit ratings, asset management, and conducting feasibility studies on an asset. Those seeking a sukuk issuer licence must have a paid-in capital of at least EGP10mn, with 50% coming from a single shareholder and 25% from a financial institution. Most board members of a sukuk SPV must have at least three years of experience as finance professionals and must have neither a direct nor indirect stake in the investments of the SPV.