The Dubai Gold & Commodities Exchange (DGCX), the largest and most diversified derivatives exchange in the Middle East, has launched GCC’s first Shari’ah Compliant Silver Spot Contract (DSSC), to provide 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 27 October 2023. DGCX will also be waiving its fees for the DSSC contract until 31 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 will also be able to take large positions in silver with no limit restrictions.
“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 in a secure and reliable way.”
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 customized online platform to register possession and ownership of commodities stored in UAE-based facilities, ensuring a seamless end-to-end process.
DGCX expects there to be significant interest in its Shari’ah Compliant Silver Spot Contract from a range of market participants, including managers of exchange traded funds (ETFs), banks and non-banking financial institutions, as well as commodities traders.
DSSC adds to DGCX’s existing portfolio of precious metals contracts, which includes Shari’ah compliant gold spot as well as silver and gold futures.