IBANK 10.2.10 Effects of true sale on sukuk holders

For asset-backed sukuk, the effects of a true sale on sukuk holders include:

(a) giving the holders a legally recognised ownership interest over the underlying assets;
(b) giving the holders realisable security over the underlying assets;
(c) giving the holders a right to payments of the principal and profits;
(d) insulating the holders from exposure to any financial problems of the originator;
(e) exposing the holders (as owners) to losses in the event of impairment of the assets; and
(f) in case of a default of the sukuk (for example, because ijarah lessees of the assets fail to pay what is due), giving the holders a claim to the assets (but not to the originator).

Note In contrast to rule 10.2.10 (f), recourse to the originator is possible in some asset-based sukuk (see rule 10.2.14 (2) (b) (iii))
Inserted by QFCRA RM/2017-1 (as from 1st April 2017).