A proposed rule change could reshape the global sukuk market as regulators, academics and issuers debate whether stricter asset ownership requirements would strengthen sharia authenticity or harm liquidity and issuance.
The discussion focuses on AAOIFI Standard 62, which aims to clarify what constitutes true asset protection in Sukuk structures. Recent reporting from the Financial Times has highlighted growing divisions within the industry. Some market participants warned that a stricter interpretation could reduce flexibility, while others argued that it was necessary to strengthen credibility in Islamic capital markets.
The debate comes at a time when Islamic finance is no longer a niche segment. Sukuk issuance has been steadily increasing in the Middle East and Southeast Asia and is increasingly distributed through global banking channels. As volumes increase, testing is also intensified. Investors, regulators and Sharia scholars are increasingly paying attention to whether Sukuk structures reflect real economic substance or rely too heavily on legal form.
Industry observers increasingly agree that the real challenge is not whether standards should evolve, but how to do so without weakening market depth or cross-border usability. Today, Sukuk are issued by governments and corporations, transacted through international banking infrastructure and managed across jurisdictions with very different regulatory and cultural frameworks. This is where theory meets implementation.
This operational dimension is at the heart of the analysis by Prospero Pica, founder of ABP Partners, a Swiss-based company specializing in the processing of complex banking transactions. With over twenty years of experience delivering cross-border banking and treasury programs in Europe, the UK, Southeast Asia and the Middle East, Prospero Pica views Islamic finance primarily as an execution discipline rather than a product category.
According to Prospero Pica, debates such as those surrounding AAOIFI Standard 62 reveal a structural reality. Compliance with Sharia law does not only exist in documentation or legal opinions. How assets are managed, how cash flows flow through treasury systems, how data is controlled, and how institutions respond under operational stress are tested daily. As standards are tightened, these levels of execution become visible.
This change has a direct impact on the banking infrastructure. Stricter asset ownership and risk allocation requirements require traceability across core banking systems, treasury platforms and reporting frameworks. This is particularly complex for internationally active institutions. Compliance must be verifiable across borders and verifiable within various supervisory regimes.
In this context, Switzerland has quietly strengthened its role as a neutral hub for processing Islamic finance. Not as a retail market for Sukuk, but as a trusted environment in which governance, program management and cross-border banking can be anchored. Swiss-based structures are often used to coordinate international operations, ensure transparency and support audit readiness – all elements that are crucial as standards evolve.
ABP Partners operates in this space and focuses on execution rather than creation. His work reflects a principle that Prospero Pica often emphasizes. “Technology must follow the bank and not replace it. The heart of change is the bank DNA.” In the context of the Standard 62 debate, this philosophy is translated into a practical message. Stricter rules will only be successful if institutions have the operational maturity to support them.
As Islamic finance continues to grow worldwide, the debate over Sukuk standards is likely to intensify. Ultimately, it highlights that the future of the market will be shaped not only by scientific interpretations, but also by the ability of banks and institutions to provide compliant financing across borders. In this transition, expertise based on actual banking execution rather than abstract design will become increasingly important.
