DUBAI - The Dubai Gold and
Commodities Exchange (DGCX) today announced the launch of the GCC's first
Shari'ah Compliant Silver Spot Contract (DSSC), aimed at providing investors
with a reliant and transparent platform for trading the white metal.
Having received regulatory approval
from the UAE Securities and Commodities Authority (SCA), the new contract will
be available for trading from 27th October 2023. DGCX will also waive its DSSC
contract fees until 31st December 2023.
With the launch of DSSC, investors
will, for the first time, be able to invest in physical silver through an
exchange in the GCC with the benefit of a central counterparty clearing house,
mitigating credit risk. By trading through DGCX, investors can also take large
positions in silver with no limit restrictions.
Against high inflation, the demand for silver continues to grow.
According to The Silver Institute, all major silver demand categories achieved
record highs in 2022, with total offtake growing by 18% to 1.242 billion ounces
Furthermore, S&P Global Ratings expects the global Islamic
finance sector to grow by 10% in 2023-2024, which will further support demand
for Shari'ah compliant securities such as DSSC.
Ahmed bin Sulayem, Executive Chairman and Chief Executive Officer
of DMCC, said, "The world will see accelerating demand for silver as the
precious metal is increasingly used in industries like solar energy and
investors maintain their focus on asset diversification. This, combined with
the increasing maturity of the global Islamic finance industry, has created the
ideal environment for DGCX to launch the region's first Shari'ah Compliant
Silver Spot Contract.
"Based on our discussions with the market and the success of
our Shari'ah Compliant Gold Spot Contract launched in 2018, we expect to see
significant interest in DSSC from both traders and investors looking to access
silver securely and reliably. We look forward to working closely with our
members to continue bringing innovative contracts to the market in the months
and years ahead."
The underlying asset of each DSSC contract, which has been
Certified by prominent Shari'ah scholars, is a 999.9 purity 900-ounce silver
bar of "UAE Good Delivery" specification. Delivery of the contract is
made seamlessly through DMCC Tradeflow, a flexible and customised online
platform to register possession and ownership of commodities stored in
UAE-based facilities, ensuring a seamless end-to-end process.