Overview: Oman’s New Regulation Governing Bonds and Sukuk

The Omani Capital Markets Authority (CMA) (now re-named the Financial Services Authority) recently passed Decision E/21/2024 which introduced the Regulation Governing Bonds and Sukuk and bringing important change to the Omani financial landscape. Aimed to enhance transparency in the market, increase investor protection and to facilitate capital raising activities, this regulatory overhaul is of strategic importance. It creates a better suited environment for the development of the bonds and sukuk markets, while aligning with Oman’s broader goals for economic diversification, as well as its objectives under Vision 2040.

Important changes introduced include:‍

1. Streamlining issuance procedures: this effectively makes it easier for issuers to infiltrate the debt capital markets. The issuance process has clearer:

a. guidelines;

b. disclosure obligations; and

c. standards for documentation,

which should simplify and reduce administrative hurdles, encouraging more issuers to access the markets.

2. Greater emphasis on investor protection: measures include making it mandatory to comprehensively disclose risks associated with bond and sukuk investment, and to provide key details, such as:

a. financials by the issuer;

b. project viability; and

c. Shari’ah compliance, for sukuk issuances,

all of which better allow investors to make better informed decisions.

3. Stricter oversight mechanisms: enhanced supervision of market participants and the enforcement of compliance standards means enhanced market integrity – essential to preventing bad practices that can undermine the trust of investors, and for maintaining market confidence.

4. Promotion of diversity and innovation: the introduction of provisions for green bonds and other sustainable financing methods, including shari’ah compliant, aligns with global trends. Sustainable finance is now more important than ever and this helps position Oman as a responsible participant in the global capital markets.

In summary, the new CMA regulation on bonds and sukuk is a significant milestone, a major step forwards in developing the financial market and ensuring economic diversification. A transparent, investor-friendly environment under which innovation is encouraged certainly paves the way for growth of the bonds and sukuk market, and contributes to the long-term economic prosperity of Oman.  

For more information, please visit the FSA website at www.cma.gov.om.