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World Gold Council Consults on Creating Global Shariah Standard on Yellow Metal
Jan 4, 2016 10:42 AM
By Rapaport News
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RAPAPORT... The World Gold Council (WGC) has joined up with
Amanie Advisors, an advisory firm for Islamic markets, to explore the
possibility of creating a global Shariah standard on gold. The two groups have
published a draft as part of a consultation with the industry.
The standard aims to give guidance on how to use gold in
Islamic financial products and transactions, according to a WGC statement
December 3. Having an accepted standard available would also help develop a
wider range of Shariah-compliant gold products, provide greater clarity for
Islamic finance investors and make Shariah-compliant instruments more
widespread and diverse.
The WGC and Amanie Advisors are
seeking views from a range of practitioners and scholars of Islamic finance to
ensure it reflects their perspectives and gives enough guidance about Shariah
requirements.
“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,” said Aram Shishmanian,
chief executive officer of the WGC.
“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.”
Shariah-compliant finance is governed by
the Koran and includes sharing risk, prohibits involvement in businesses
deemed as unethical, backs socially responsible investing and prohibits
interest payments, according to a Bloomberg report December 30. Islamic bonds
pay returns based on an underlying asset in the form of a profit rate, the news
report said.
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Tags:
Amanie Advisors, gold, Islamic finance, Rapaport News, Shariah finance, World Gold Council
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