Brooklyn State Senator Kevin Parker announced a bill today to create an alternative bond market that would be permissible under Islamic law by creating alternatives to the traditional interest-based bonds.
Many Islamic societies use the alternative structure, known as “sukuk,” since Islamic law prevents the securing of interest-bearing bonds. Parker argues that opening up New York to sukuk would open the state’s bond market to a new kind of international investor.
“With the introduction of my legislation, New York leads the nation in fostering new investment opportunities to create jobs, reduce the cost of borrowing, and bring new entrants into New York’s bond markets,” Parker said. “As the historical hub for international commerce and finance, it is imperative we not only stay competitive, but lead in the global marketplace.”
He notes that nations like England, France and South Africa are already in the process of creating sukuk investment vehicles to encourage international investment.
And, his office notes that if the bill passes it will bring in a new, local class of investor that has traditional been left out.
“This legislation reverses an historic inequity where far too many New Yorkers have been unable to benefit from public-private partnerships with the State. I am proud that today, New York once again leads the nation in affording all citizens equal opportunity,” Parker said.