With the expansion of instruments of capital market in the Islamic and Western countries, in Iran too the necessary grounds for the use of such instruments were provided with the enactment of the Securities Market Act in 2005. This act, for the first time, entrusted the responsibility of designing new financial instruments upon the Securities and Exchange Organization and the responsibility of approving such instruments upon the High Council of Stock Exchange.
In addition, the act of new financial instruments was ratified in 2009 by the parliament, attempting to facilitate the execution of the general policies of the Constitution, Principle 44. Based on this act, the SPV, i.e. the financial institution that can finance through the issuance of securities by carrying out the transactions pertinent to Islamic contracts, is introduced and the grounds for the use of Islamic financial instruments were provided so that the capital market will witness new Islamic financial instruments that were foe years limited to stocks and bonds. The issuance of Islamic securities requires different foundations; one of the most common is the trustee. Trustee is a natural or legal entity that constantly reviews and comments on the consumption of funds, maintenance of accounts, financial statements, and performance of issuer according to the signed contract in order to maintain the interests of the owners of securities and gain assurance about the accuracy of issuer’s activities.
The trustee will act as the trustee of the investors, supervising all operational processes of issuance of securities. In Iran, the responsibilities of the trustee are entrusted on “Central Asset Management” Co., which embarks on establishing SPVs (Limited Corporation) in order to use them with regard to the process of issuance of securities. Among other responsibilities of this corporation is to do all administrative, financial, managerial, legal and lawful responsibilities of an SPV, maintain the accounts and financial books of the institution and rejecting them after the end of the contract. This corporation is now working while 96% of its stock is held by the CSDI, 2% by the Corporative Co of the Staff of Securities and Exchange Organization, and another 2% by the Iranian OTC.