Treasury aims to remove obstacle to Islamic bond issuance

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The government will seek to remove one of the final technical obstacles to the issuance of Islamic bonds, the Treasury said on Friday.

Islamic finance professionals in the UK, which hosts five stand-alone Islamic banks, were optimistic that if Parliament votes in favour next month to regulate sukuk as bonds rather than investment vehicles, it would encourage the growth of a market that has struggled for traction.

If passed, the measure could save issuers of Islamic bonds up to 10,000 pounds a year, a spokesman for the Treasury said.