IntroductionSukuk is an Arabic term for financial certificate. It is the Islamic equivalent of bond and nomarlly known as an Islamic or Sharia obey ‘Bond’ simultaneously in actual fact.It is an asset-backed instrument and tradable shari’ah compatible trust certificates. In its simplest form Sukuk is a certificate evidencing ownership of an asset .The Sukuk structures rely on the creation of a Special Purpose Vehicle (SPV). Sukuk whose singular is sakk whose is used to provide alternative funding for financing projects through asset securitization.A recent reform that allows Islamic Finance to participate in yet another area of conventional finance. In Islamic, fixed income and called as interest (riba) bearing bonds are not permissible.It is principles prohibit the charging, or paying of interest.Financial assets that obey with the Islamic law can be classified in the secondary markets. Based upon existing Islamic Financial transactions, sukuk offer Islamic financial institutions and investors another way to raise capital through profit sharing without a prime rate, but achieving the same result as conventional finance. Sukuk are widely regarded as controversial due to their perceived purpose of evading there strictions on Riba. This can be regarded as the fundamental test of interest. Sukuk offer investors fixed return on their investments which is also similar in appearance to interest in that the investor’s return is not necessarily dependent on the risks of that particular venture.Sukuk market in Malaysia enjoys advantages of proactive stanceMalaysia’s sukuk, or Islamic bond, market benefits from having a large and diverse investor base, including some non-Islamic as well as Islamic investors, and strong growth in sukuk assets in recent years has underlined the advantages of Malaysia’s proactive stance on market developmentExamples of sukuk issuance by Japanese companies On the other hand, global financial institutions like Nomura Holdings and BTMU are motivated to enter this market to (1) diversify their funding sources by region and currency, (2) raise funds aimed at providing sharia-compliant financial services to the local market, (3)improve their image and name recognition in the Islamic world, (4) gain access to investors in Southeast Asia and the Middle East, (5) assume the role of an arranger for future Japanese sukuk issuances (a longer-term objective of accumulating expertise and helping other Japanese companies obtain funding through sukuk), and (6) strengthen their relationships with governments seeking to develop Islamic financial markets and with major market players.