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  • Monday, 13 June 2016 13:12

Underwriting refers to the process of purchasing securities from an issuer or their legal representative and being committed to pay for the whole price according to the contract (Exchange Market Act, Article 1, Paragraph 28). The commitment of underwriting is the commitment of a third party for purchasing those securities that are not sold by the underwriting deadline. Based on this definition, it could be said that a private underwriting institution is different from buyers. If the Ijara Sukuk are not sold according to the forecast, the SPV will be obliged to sign a contract with the underwriter so to sell them the rest of the securities. Using this method, the required sources for buying the assets in question will be provided. Therefore, an underwriter is anyone who guarantees the purchase of unissued stocks within a certain period of time (Executive Instruction for Regulating Underwriting Agreements, Article 1, Paragraph F) and is a third party who has guaranteed the purchase of the stocks that are not sold by the underwriting deadline and as per case, has the role of a leader, manager, or coordinator of the underwriting (Executive Instruction for Regulating Underwriting Agreements, Article 1, Paragraph N).
Underwriter is introduced by an originator and if the capital is determined to be sufficient, the underwriter will be selected with the approval of the organization (Instruction for Issuance of Approved Lease securities, 2010: Article 10). Based on the Stock Market Act, Article 1, Paragraph 18, one of the bodies that could act as an underwriter is the financing corporation. Underwriting is the first step of issuance of lease securities, and the next step is public offering. The financing corporation, who can act as the underwriter, could act as the agent of selling (Stock Market Act, Article 1, Paragraph 18). Thus, the financing corporation will the agent of selling at the stage of underwriting Ijara Sukuk and the same corporation will be the underwriter and will be obliged to buy the unsold securities after the public offering and in case not all stocks are sold. "If the assets considered for issuance of Ijara Sukuk could not be divided per certain units, use of underwriter(s) will be obligatory at the stage of offering. Use of underwriters in issuance of Ijara Sukuk for the assets dividable to certain units by the request of the originator and approval of the organization is not obligatory" (Instruction for Issuance of Lease Securities, Article 22).