This document distributed on 6 May 2013 during the “Journée boursière” provides an overview of the Islamic Finance Market in Luxembourg and highlights the benefits of Sukuk Listing and Trading in Luxembourg. 16 Sukuk have been listed on the Luxembourg Stock exchange.

Investors’ appetite is pushing Sukuk into the mainstream
Many investors are excited about the potential of Islamic finance. Although this industry did not escape the effects of the global financial crisis, the overall consensus is that it weathered the storm well. Sovereign and sovereign-related issuance will continue to dominate, shape, and underpin the Sukuk market. In term of Sukuk products listed on the Islamic Finance Market, Luxembourg is ranked third worldwide and first in Europe for Islamic Investments Funds. François Génaux, Partner, Financial Services Advisory Leader, PwC Luxembourg, commented: “Luxembourg also wants to foster diversification, innovation and extend its international financial activities. This contributes to the competitiveness of the Luxembourg business environment”.

Luxembourg can offer unique synergies
In 2002, the Luxembourg Stock exchange was the first European Stock Exchange to list Sukuk. With more than 3,127 listed issuers coming from 103 countries, the Luxembourg Stock Exchange meets capital market players’ needs as a result of an 80-year old experience. Luxembourg remains one of the most competitive, stable and secure environments in Europe to locate securitisation transactions. “We are very pleased to release this brochure with PwC today. The Luxembourg Stock Exchange has acquired a lot of experience in listing innovative structures from issuers in many countries around the globe. We believe that Luxembourg, one of Europe’s leading centres for Islamic finance, can offer unique synergies for issuers of Islamic instruments” said Hubert Grignon Dumoulin, Member of the Executive Committee, Luxembourg Stock Exchange.

Development of Islamic Finance set as priority
The development of Islamic Finance in Luxembourg has been set as priority by the Grand Duchy. “Luxembourg is recognised as one of the leading European centres for Islamic Finance. (...) We have a long track record in this sector” said Luc Frieden, Minister of Finance. In 1978, Luxembourg was the first western country in hosting Islamic Finance Institutions. The first international Sovereign Sukuk (Malaysia) was listed in Luxembourg in 1983. Luxembourg has the first mover advantage in Islamic Finance in Continental Europe and is a leading cross border provider of financial services including Shari’ah products. The Grand Duchy is a leading financial centre in Investment Funds domiciliation, cross border distribution and asset servicing thanks to its regulatory framework which offers the right tools to launch and structure Islamic funds.

Luxembourg reinforces its leading position as a hub for Islamic Finance
Luxembourg will reinforce its leading position as a hub for Islamic Finance thanks to a fast and smooth implementation of AIFMD. In 2010, the Luxembourg tax authority issued two circulars addressing the tax treatment of certain Islamic products and the Central Bank of Luxembourg became a member of both the Islamic Financial Services Board and the International Islamic Liquidity Management Corporation. In 2011, CSSF published guidance for Sukuk and Shari’ah Investment funds set up. Last year, ALFI published best practices for setting up and servicing Islamic funds. This is a clear advantage for Luxembourg. Serene Shtayyeh, partner and Middle East Finance Leader, PwC Luxembourg, also emphasised the benefits of Luxembourg as an Islamic hub: "The demand for Shari’ah products, particularly in the Sukuk market, continues to be strong with significant growth projections. Luxembourg, with its flexible regulation and experienced financial services sector is positioned perfectly to support this growth from Europe."

Discover our brochure: www.pwc.lu/en/capital-markets/docs/pwc-lux-stock-exchange-sukuk-listing.pdf