April 11 (Reuters) - Pakistan's capital market regulator plans to streamline rules for issuing Islamic bonds, providing local firms with alternative funding options as demand for sharia compliant products continues to outstrip supply.
The Securities and Exchange Commission of Pakistan (SECP) has proposed amendments to its 2015 sukuk regulations to make the process easier and cheaper for issuers, with a two-week public consultation on the amendments until April 24.
"SECP shall finalize the amendments soon after the completion of public consultation," spokesperson Bilal Rasul told Reuters.
"This is a fairly quick process, it tends to be completed within a week or two."
Amendments include waiving mandatory underwriting when the purpose of issuing sukuk is to repay existing debt and reducing the minimum number of underwriters from two to one.
Pakistan has seen strong growth of Islamic investment funds which has fueled demand for sukuk. Islamic mutual funds held 242.7 billion rupees ($2.3 billion) in assets as of December, or 37 percent of the total.
Around two-thirds of assets in the country's voluntary pension system are now managed under Islamic principles.
The SECP also wants to emphasize the use of special purpose vehicles for sukuk issuance, a common practice in other sukuk.
It would also align the definition of sukuk with that of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), a global standard-setting body.
The regulator has also asked the stock exchange to submit its own set of proposals to reduce the costs of both market making and issuance of sukuk. ($1 = 104.7000 Pakistani rupees) (Reporting by Bernardo Vizcaino; Editing by Kim Coghill)