Form versus substance: AAOIFI projects and Islamic fundamentals in the case ofsukuk

Purpose The purpose of this paper is to investigate the role of standard‐setting bodies and rating agencies which compete for authority in Islamic finance. It does so through a consideration of a recent debate over the permissibility of sukuk financing. Design/methodology/approach The methods used are a combination of archival and bibliographic research, coupled with the author's previous research on Islamic banking and finance. Findings While the debate over sukuk hinged on whether the structures are shari'a compliant in form only, not in substance, the role of sukuk in neoliberal reform and the privatization of state resources reveal a deeper potential conflict between Islamic standard‐setting bodies and global neoliberal projects more broadly. Research limitations/implications The implications are significant for other Islamic finance contractual forms and modes of finance. They are also significant in light of the global financial crisis, and the recent debt crisis in Dubai. The research limitations have to do with the fact that this is a fast‐moving field and the global financial crisis has destabilized many institutions – both conventional and Islamic – in structured finance. Originality/value Few scholars have considered sukuk 's legitimacy, or the competition between Islamic standard‐setting bodies and non‐Islamic global rating agencies.