On July 10, 2018, the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2018 was made and came into force on July 11, 2018. The Order amends the definition of "Alternative Finance Investment Bonds" in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. The result of the amendment is that AFIBs, such as Sukuk, will be permitted to trade on multilateral trading facilities or organised trading facilities and ensure AFIBs are treated in the same way as conventional bonds for trading purposes.
The amendment removes a glitch creating disparity of treatment between AFIBs and conventional bonds, which had created an obstacle to the use of U.K. venues for the issue and trading of AFIBs. This was contrary to the U.K. Government's standing commitment to provide a level playing field for Islamic finance instruments in regulation and taxation in the U.K.
The Order also amends the Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001 so that a person administering a benchmark as specified in the RAO will be regarded as carrying on the activity by way of business and will therefore require authorization under the Financial Services and Markets Act 2000 to do so.
The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2018 (SI 2018/831) is available at: http://www.legislation.gov.uk/uksi/2018/831/pdfs/uksi_20180831_en.pdf and the explanatory memorandum is available at: http://www.legislation.gov.uk/uksi/2018/831/pdfs/uksiem_20180831_en.pdf.
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