DGCX Waives Fees for Its Shari’ah Compliant Spot Gold Contract
The Dubai Gold & Commodities Exchange (“DGCX”), the largest and most diversified derivatives exchange in the Middle East, has announced that it is waiving fees for its Shari’ah Compliant Spot Gold Contract (contract symbol: “DGSG”).
Having now received regulatory approval from the UAE Securities and Commodities Authority (“SCA”), the fee waiver for DGSG will run from 21 August 2023 until 31 December 2023. During this period, DGCX will waive all DGCX and Dubai Commodities Clearing Corporation (“DCCC”) fees, including those associated with trading, clearing and delivery. This fee waiver excludes the SCA fee of USD 0.03.
DGCX is also seeking approval from SCA to waive fees for its Gold Futures contract and will update the market accordingly.
Against a backdrop of global inflationary pressure and economic uncertainty, the demand for gold has remained robust as investors seek safe-haven assets. In the first half of 2023, the price of gold increased by 5.4%, closing at USD 1,912.25/oz at the end of the period. Excluding developed market stocks, gold has outperformed nearly all other major assets this year, demonstrating its role as a reliable store of value.
Louis Hems, Commercial Director of DGCX, said: “Having seen significant growth in the DGCX Shari’ah Compliant Spot Gold Contract since its launch in 2018, we expect the waiving of fees to attract greater volumes and act as a catalyst for the contract over the long-term by bringing in new investors from across the region and around the world. At the same time, the increasing demand for gold in the current economic environment, alongside the steady growth of the Islamic finance industry, is adding further support to volumes and liquidity. DGCX is committed to working closely with its members to create a market that is as efficient and fair as possible.”
The DGSG contract is compliant with Shari’ah principles for gold ownership and is certified by prominent Shari’ah scholars. Each contract is backed by 1kg of allocated and segregated gold bars with a minimum purity of .995, meeting "UAE Good Delivery" specifications. Delivery is made through DMCC Tradeflow, an online platform tailored to register possession and ownership of commodities stored in UAE-based facilities, ensuring smooth delivery of contracts.
DGSG is part of DGCX’s diverse portfolio of precious metal contracts, including spot and futures contracts for gold, silver, and copper. DGCX is working on introducing new contracts, such as the Shar’iah Compliant Silver Spot Contract, which is currently being reviewed by the UAE Securities and Commodities Authority (SCA).
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.