Dubai: Religious scholars are imposing tougher rules on the sale of Islamic bonds to investors after stating that most of the securities may not fully conform to the teachings of the Muslim faith.
Investors bought $30 billion of so-called sukuk in the past year that avoid breaching Sharia prohibitions on the payment or receipt of interest by using property or other assets to provide an income.
New guidelines require investors to become the legal owners of those assets rather than nominal holders, the Bahrain-based Accounting and Auditing Organisation for Islamic Fin-ancial Institutions said on its website.

The rules from AAOIFI's board of 18 religious advisers led by Chairman Shaikh Mohammad Taqi Usmani will make it harder for companies to issue Islamic debt at a time when borrowing is already shrinking because of the global credit crisis. Sales of sukuk dropped to $856 million so far this year from $4.7 billion in the first quarter of 2007.