Published 3 December, 2015 Source: www.gold.org
The World Gold Council, the market development organisation for the gold industry, and Amanie Advisors, the world’s leading advisory firm for Islamic markets, are exploring the creation of a global Shariah Standard on Gold (“the Standard”). An Exposure Draft of the Standard has been published as part of an open consultation with industry.
The Standard aims to provide guidance on the use of gold in Islamic financial products and transactions. The availability of an accepted Standard would also facilitate the development of a wider range of Shariah-compliant gold products, provide greater clarity for Islamic finance investors and increase the overall volume and diversity of liquid Shariah-compliant instruments globally.
The World Gold Council and Amanie Advisors have launched this consultation to seek the views and perspectives of a wide range of Islamic finance practitioners and scholars in order to ensure that the Standard reflects their perspectives and provides sufficient and practical Shariah guidance. The exposure draft provides guidance on Shariah principles that are used in financial dealings that involve gold. The Standard has been developed on a non-exclusive basis and so should be applicable to all areas of Shariah-compliant financial transactions that involve physically-backed gold.
Aram Shishmanian, Chief Executive Officer of the World Gold Council, said:
“As the Islamic financial services market grows in size and importance, so does the need for a greater understanding of the application of Shariah guidance on the use of gold. While there is some guidance for gold coins and bars, there is virtually no guidance on gold elsewhere in the financial sector. We know there is a desire and demand for Shariah-compliant gold backed products amongst institutions and individuals and our purpose with this consultation is to ensure that any Shariah Standard on Gold developed by the World Gold Council takes into account a full range of views, inspires confidence and ultimately provides access to gold in the Islamic world.”
Datuk Dr Mohd Daud Bakar, Chairman of Amanie Advisors, said:
“Gold has a unique status in Islam, but the existing Islamic standards for gold are fragmented, hampering product development and market demand. The development of a Shariah Standard on Gold is part of a broader process of harmonisation within the industry. It will provide clear guidance on gold to individuals and institutions, which will bring time and cost savings to the industry, great choice, and should ultimately enhance liquidity and growth within the Islamic finance industry.”
Interested parties are invited to respond with views on the exposure draft of the proposed Shariah Standard for Gold. The exposure draft and consultation questionnaire can be found online here: www.gold.org/shariah. The consultation period closes on 31 December 2015. ============================================================================ AAOIFI SHARIAH STANDARD ON GOLD UNDER DEVELOPMENT IN COLLABORATION WITH THE WORLD GOLD COUNCIL AND ITS EXPECTED IMPACTS* Dr Mohd Daud Bakar – Founder and Executive Chairman of Amanie Advisors and International Shariah Scholar (*Paper presented at AAOIFI-World Bank 11th Annual Conference on Islamic Banking and Finance, 6-7 November, 2016, Manama, Bahrain). Link: Download Here