Law No. 2013-30 of July 30, 2013, relating to Islamic Sukuk

No. 62 Official Journal of the Tunisian Republic — August 2, 2013 Page 2301 Law No. 2013-30 of July 30, 2013, relating to Islamic Sukuk (1).
In the name of the people,
The Constituent National Assembly having adopted, The President of the Republic promulgates the law whose text follows:

Chapter I
General Provisions
Article 1 - Sukuk are negotiable instruments representing equal shares in the ownership of existing or to be created assets, usufructs, services, rights, or a combination thereof, as well as currencies and claims from the subscription proceeds. They are issued under a contract in accordance with Shariah standards and based on the profit-and-loss sharing principle.
Art. 2 - Sukuk are considered securities within the meaning of Article 1 of Law No. 2000-35 of March 21, 2000, relating to the dematerialization of securities.
Art. 3 - Sukuk may be issued in Tunisian dinars or foreign currencies, subject to compliance with the prevailing exchange legislation and regulations.
Art. 4 - Sukuk may be secured by personal or real guarantees in accordance with Shariah standards and prevailing legislation.
Art. 5 - Sukuk are issued for the benefit of:

• The State,
• Public institutions and enterprises and local authorities,
• Private sector companies under conditions established by decree.
  Art. 6 - Sukuk issued or guaranteed by the State on international financial markets are exempt from the application of Articles 8 to 24 of this law.

Chapter II
Issuance Conditions
Art. 7 - Sukuk issued or guaranteed by the State are authorized by the finance law. Each issuance is ratified before the utilization of the resulting proceeds. The issuance of sukuk for public institutions, enterprises, and local authorities is authorized by the ministry responsible for finance. ____________ (1) Preparatory work: Discussion and adoption by the Constituent National Assembly in its session of July 17, 2013. Art. 8 - The call for subscription to sukuk is made through a "sukuk issuance document" prepared and signed by the legal representative of the issuer and bearing the approval of the Shariah supervisory committee regarding the issuance. Public institutions, enterprises, and private sector companies must obtain an attestation from the statutory auditor(s) on the sukuk issuance document and publish it via a legal notice in the Official Journal of the Tunisian Republic. This publication does not confer upon the sukuk subscription call the status of a public offering to retail investors. The sukuk issuance document must include at least the following information:

• the issuer's decision to issue sukuk and the approval of the Shariah supervisory committee regarding this issuance, specifying the list of committee members,
• the sukuk issuance contract(s),
• the total amount of sukuk, their number, nominal value, issuance fees, and payment method,
• the opening and closing dates of subscription,
• the estimated yield rate,
• the list of participants in the subscription operation and each party's role,
• the nature of the guarantee and the procedures for its enforcement in case sukuk guarantees are adopted under Article 4 of this law,
• a detailed description of the allocation of issuance proceeds,
• an overview of the economic and social feasibility or the objective of the issuance operation,
• the negotiability and redemption conditions for sukuk according to the governing contract(s),
• designation of the party to whom ownership of the underlying assets is transferred, as well as the party entrusted with managing and investing these assets,
• indication of the remuneration required in exchange for the management and investment of the underlying sukuk assets,
• the conditions and procedures for sukuk extinction.
  An issuer seeking to resort to a public offering of sukuk must comply with the provisions of Law No. 94-117 of November 14, 1994, reorganizing the financial market and notably its Article 2, as well as regulations issued by the Financial Market Council on this matter.

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Art. 9 - Any sukuk issuance document not containing the information stated in Article 8 of this law is considered null and void.

Chapter III
Sukuk Common Fund
Art. 10 - The sukuk issuance operation is carried out through the creation of a common sukuk fund, unless the Shariah supervisory committee determines it is not required.
Art. 11 - Shares of the common sukuk fund are considered sukuk within the meaning of Article 2 of this law.
Art. 12 - The common sukuk fund is a co-ownership entity with the sole purpose of acquiring assets subject to the sukuk issuance operation.
Art. 13 - The common sukuk fund does not have legal personality, and the provisions of the Code of Real Rights regarding undivided ownership, as well as those governing partnerships in participation, do not apply to it. Sukuk holders, their heirs, beneficiaries, and creditors cannot trigger the division of the existing common sukuk fund. Any contrary stipulation is deemed unwritten. Art. 14 - The establishment of the common sukuk fund or its early liquidation, in cases other than those provided for by the internal regulations, are subject to approval issued by the Financial Market Council under conditions established by decree. Art. 15 - The common sukuk fund is established jointly by the management company and the depositary. Art. 16 - The management company and the depositary establish the internal regulations of the common sukuk fund, which must state its purpose, functions, and liquidation mechanism. Art. 17 - The issuer designates or creates an independent management company responsible for managing the assets of the common sukuk fund and performing the following functions:

• protection of sukuk holders' rights,
• project management according to the sukuk issuance document,
• management of the common sukuk fund's assets,
• publication of an information bulletin dedicated to sukuk holders regarding their asset status,
• any other mission specified in the sukuk issuance document.
  The management company must be a joint-stock company with the sole purpose of managing the common sukuk fund. It represents the fund in all legal actions, both as plaintiff and defendant, and for any act affecting their rights and obligations. Art. 18 - The exercise of the management activity for the common sukuk fund is subject to approval issued by the Financial Market Council under conditions fixed by decree. Art. 19 - The management company may not incur debts on behalf of the common sukuk fund nor mortgage its assets. Art. 20 - The management company may, after the issuer's approval, designate an investment agent responsible for project execution. Art. 21 - The depositary is a bank within the meaning of Law No. 2001-65 of July 10, 2001, relating to credit institutions. The depositary is responsible for safeguarding the shares of the common sukuk fund and its cash reserves. It ensures that decisions made by the management company comply with prevailing legislation, regulations, and the internal regulations of the common sukuk fund. It oversees the collection of income from profits, rents, and other sources, and the distribution of net sukuk benefits and their revenues to holders according to the sukuk issuance document. Art. 22 - The management company and the depositary are individually or jointly liable, as applicable, to third parties and sukuk holders for violations of the legislative and regulatory provisions applicable to the common sukuk fund, breaches of its internal regulations, or faults regarding its interest. The court may rule, upon the request of a sukuk holder, on the dismissal of the management company's or the depositary's executives. Similarly, the depositary may request the court to dismiss the management company's executives and must inform the statutory auditor. In both cases, the court appoints a provisional administrator until new executives are designated or, if designation appears impossible, until liquidation. Art. 23 - Upon the extinction of sukuk, the common sukuk fund will be liquidated and the liquidation proceeds distributed to sukuk holders according to the conditions set forth in the sukuk issuance document.

No. 62 Official Journal of the Tunisian Republic — August 2, 2013 Page 2303
Chapter IV
The Shariah Supervisory Committee
Art. 24 - The registration and maintenance procedures for sukuk are governed by the provisions of Law No. 2000-35 of March 21, 2000, relating to the dematerialization of securities and the implementing texts thereto, unless otherwise derogated by this law. Art. 25 - Sukuk are traded and redeemed after the close of subscription in accordance with Shariah standards governing assets, claims, currency, and exchange rates, and according to the conditions stipulated in the sukuk issuance document and applied by decisions of the Shariah supervisory committee. Art. 26 - Sukuk are negotiable on the Tunis Stock Exchange in accordance with Law No. 94-117 of November 14, 1994, and regulations issued by the Financial Market Council on this matter. Sukuk issued in foreign currencies may be negotiable on foreign stock exchanges. Art. 27 - A Shariah supervisory committee is appointed by the issuing party and is responsible for ruling on all Shariah-related matters concerning the sukuk issuance operation, including fatwas and Shariah audits. Art. 28 - The ministry responsible for finance designates a Shariah supervisory committee tasked with studying Shariah-related matters, issuing fatwas, and conducting Shariah audits for sukuk operations issued or guaranteed by the State or issued by local authorities. Art. 29 - Decisions of the Shariah supervisory committee are binding. The committee submits, upon request, an annual report and periodic reports to the board of directors or supervisory board of the management company regarding the latter's compliance with Shariah standards in its activities. The committee consists of at least three members selected based on their skills and experience in Islamic financial practice jurisprudence. They are appointed for a term of three years, renewable once. Members of the Shariah supervisory committee are bound by professional secrecy regarding information and documents held in the course of their duties. In case of violation, the provisions of Article 254 of the Penal Code apply to them. This law shall be published in the Official Journal of the Tunisian Republic and executed as a law of the State. Tunis, July 30, 2013. President of the Republic Mohamed Moncef El Marzougui