Introduction
In 2023, the Capital Market Authority (CMA) issued a decision regulating green and sustainability‑linked bonds and sukuk. Under this framework, green bonds and sukuk are those whose proceeds are fully allocated to financing new projects, or refinancing existing projects in whole or in part, that qualify as environmentally friendly green projects, while sustainability‑linked bonds and sukuk are instruments whose structural or financial features are tied to the issuer’s future key performance indicators and agreed sustainability targets as set out in the issuance documentation.
Initiatives
- The Board of the Securities and Commodities Authority approved a proposal to exempt companies wishing to list their green or sustainability‑linked bonds or sukuk on one of the local markets from registration fees for the year 2023, in line with the declaration by His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the UAE, of 2023 as the “Year of Sustainability,” aimed at highlighting the UAE’s rich legacy of sustainable practices and its clear agenda to advance sustainable development, particularly in relation to sustainable economic growth.
- This exemption from registration fees for green and sustainability‑linked bonds and sukuk was also extended for the year 2024.
Relevant decisions and circulars
- Board of Directors’ Decision No. (17) of 2014 concerning the Debt Securities Regulations.
- Board of Directors’ Decision No. (16) of 2014 concerning the Sukuk Regulations.
- Chairman of the Authority’s Board of Directors’ Decision No. (21/R.M) of 2023 regarding the Regulation of Green and Sustainability‑Linked Bonds and Sukuk.
- Chairman of the Authority’s Board of Directors’ Decision No. (29/R.M) of 2023 regarding the exemption from registration fees for green and sustainability‑linked bonds and sukuk during 2023.
- Chairman of the Authority’s Board of Directors’ Decision No. (15/R.M) of 2024 regarding the extension of the exemption from registration fees for green and sustainability‑linked bonds and sukuk.