This system is called the local authority project financing system for 2014 and is in force from the date of its publication in the Official Gazette.
The following words and phrases where contained in this system shall have the meanings assigned to them below unless the presumption indicates otherwise:
Bank: city and Village Development Bank.
Board : the board of Directors of the bank.
General manager : general manager of the bank.
Local authority : the municipal council or the committee acting in its place.
The bank works to finance investment and development projects within the limits of the local authority under non-interest financing contracts in accordance with one of the following formulas:
A. Contract funded project in partnership standing with the local authority and the private sector or with the private sector.
B. Project financing contract in partnership with the local authority, with the local authority gradually replacing the bank in ownership of the project.
A. Islamic finance instruments may be traded after the closing of the IPO, either before or after the start of the project activity, in accordance with the Shari'a regulations that take into account the provisions of asset trading, debt and exchange provided for in Paragraph (B) of this article and as determined by the authority.
B.1. Islamic finance instruments may be traded in place of assets or mixed assets of assets, benefits and rights.
2. The exchange provisions apply to Islamic finance instruments that are replaced or mostly in cash.
3. Islamic finance instruments that have been replaced or most of which have become debt may not be traded except by way of debt transfer.
A. The prospectus and any of the Islamic finance sukuk contracts may not contain a provision guaranteeing a party's share in the venture capital or guaranteeing a lump-sum or attributable profit to the capital.
B. The Issuer shall guarantee the value of the Islamic finance instrument in cases of infringement, default or violation of the terms agreed in the prospectus or the Islamic finance instrument contract.
J. The promise of a third party that has a personality independent of the parties to the contract to contribute free of charge to the compensation of the loss in the project in question, which is independent of the contract and does not affect the validity of the contract by not fulfilling this obligation.
Dr. The government, any official public institution or public institution and any other issuer of Islamic finance instruments may establish a fund to counter the risks of investing in the project, provided that the assets of this fund shall be distributed upon amortization to the owners of Islamic finance instruments by joint decision of the council and the authority, provided that this is guaranteed in the prospectus.
A. The profit is due in the terms specified in the prospectus and the amount of this profit is determined by default and distributed among the owners of the Islamic finance sukuk in accordance with the terms of the prospectus.
B. The profit distributed to the owners of the Islamic finance sukuk during the life of the project and its exploitation shall be considered payments under the account until the extinguishment of the Islamic finance sukuk.
J. The issuer may not borrow to compensate the owners of Islamic finance instruments when the actual return on the expected profit falls short.
A. The prospectus shall contain a binding promise to the sukuk owners to extinguish their shares in the sukuk to the issuer.
B. Islamic finance instruments are extinguished in accordance with each contract approved in their issuance, which must be indicated in the issuance leaflet approved by the authority and approved by the council.
The board shall issue the necessary instructions to implement the provisions of this order.