The Securities and Commodities Authority (SCA) has decided to extend the fee exemption period granted to companies listing green and sustainability-linked bonds and sukuk.
The decision, issued by chairman His Excellency Mohammed Ali Al Shorafa Al Hammadi, indicated that the exemption from paying the registration fee—provided for in a decision issued by the chairman previously—will be extended with regard to registration requests filed this year, without prejudice to the provisions of Decision No. 5 of 2023 on the registration of securities for listing.
This decision underpins efforts aimed at encouraging companies to issue green and sustainability-linked bonds and sukuk to finance sustainable projects that focus on climate and the environment, as well as urging businesses and investors to look for environmentally friendly investment opportunities.
In June, the board of directors approved a proposal to exempt companies listing green and sustainability-linked bonds and sukuk on domestic exchanges from paying the registration fee for 2023.
The decision highlights the actions and measures adopted by the UAE to achieve sustainable development goals on more than one level, especially when it comes to sustainable economic growth.
The fee for registering green and sustainability-linked bonds and sukuk is provided for under Board Chairman’s Decision No. (32/Chairman) of 2018 on technical service fees and is calculated at a rate of 0.01% of the value of the issue, up to a maximum of AED 30,000.
Last year, the SCA issued a decision to regulate green and sustainability-linked bonds and sukuk permitting public joint stock companies to issue green bonds and sukuk whose proceeds are used entirely to finance or refinance environmentally friendly projects (such as those revolving around renewable energy, energy efficiency, pollution prevention or mitigation, environmentally sustainable management of living natural resources, land use, aquatic biodiversity conservation, clean transportation, and sustainable management of water and sanitation). Companies may also issue sustainability-linked bonds and sukuk through which they can achieve their own sustainability goals within a predetermined time frame. Such bonds and sukuk tend to have financial or structural characteristics that may vary depending on whether or not the issuing company achieved sustainability objectives.
