DGCX Launches GCC’s First Shari’ah Compliant Silver Spot Contract

The Dubai Gold & Commodities Exchange (“DGCX”), the largest and most diversified derivatives exchange in the Middle East, 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 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.

Against a backdrop of 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 (Boz). 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, 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 in a secure and reliable way. 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.

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.

About DGCX:

The Dubai Gold & Commodities Exchange (DGCX) is the Middle East’s largest digital marketplace where traders manage risk, protect value and grow portfolios. We drive liquidity in the market by offering a broad range of futures and options contracts covering base and precious metals, hydrocarbons, equities and currencies. Our members get the assurance of a highly regulated derivatives trading and clearing platform which has global credibility and a proven settlement track record.

The DGCX owns and operates the region’s largest and only multi-asset Clearing House – DGCX Clearing. It is recognised as a licensed Central Clearing-Counterparty (CCP) by SCA and a 'Recognized Clearing House' (RCH) by the Monetary Authority of Singapore (MAS). Additionally, the exchange and clearing house is also regulated by the Securities & Commodities Authority (SCA) in the UAE.

Our unique location at the convergence of trade flows, time zones and commerce allow us to seamlessly fill a vital position in the global derivatives landscape, working across any market and geography and providing uninterrupted service with simple and transparent fees, benefitting from the UAE’s progressive regulatory framework.