SGX Launches World’s First Shariah-Compliant Gold Futures Contract

Singapore Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term (SGX) announced today that its Singapore Kilobar Gold Contract has become the world’s first Shariah-compliant gold futures.

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SGX launched the world’s first exchange-traded, physically delivered wholesale gold futures in October 2014, in partnership with the World Gold Council and the Singapore Bullion Market Association, as reported by Finance Magnates.

As per SGX’s statement, the contract is now certified by Amanie Advisors, an advisory firm specialising in Islamic finance solutions, to be in compliance with the Shariah Standard on Gold as set out by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).

We expect a considerable increase in demand for gold in South-East Asia as a result of the new standard.

William Chin, Head of Metals and Bulk Commodities at SGX, commented: “This unlocks a new investment and Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term option for the rapidly growing Islamic finance industry estimated to hold about $2 trillion in assets. It also strengthens Singapore’s position as an international centre for Islamic finance, and builds on our vision to develop a global trading hub for gold.”

Natalie Dempster, Managing Director for Central Banks and Public Policy at the World Gold Council, added: “We are delighted that the SGX contract has been certified Shariah compliant. We expect a considerable increase in demand for gold in South-East Asia as a result of the new standard, and this will offer investors a great way of buying kilobars via an exchange.”

The development will appeal to new customers in the region, especially Indonesia and Malaysia, and will also drive innovation in Islamic investment products.

The Singapore Kilobar Gold Contract seeks to serve as a transparent and centralised Asian price-discovery platform for the gold market. Globally, around 60 percent of the precious metal is traded in Asia.