On 28 March, the International Islamic Financial Market (IIFM) and World Gold Council have led the IIFM-WGC Industry Consultative Meeting on Gold Documentation and Products Standardisation in Istanbul, Turkey. The meeting was hosted by Borsa İstanbul and organized by the Islamic Finance Directorate.
The meeting assessed current market practices with respect to identified gold related documentation and products. Deliberations were aimed to inform and obtain input from key stakeholders including regulators, financial institutions, law firms, exchanges, industry associations and Shari’ah scholars on standardised product documentation through a series of discussions including: the use of the Allocated Gold Agreements, Gold Consignment Agreements, gold swap product confirmation and other products such as ETFs and gold Sukuk.
During his welcoming remarks, Dr. Şenol Duman, Executive Vice President of Borsa Istanbul, stressed out the importance of Stock Markets and the role of Borsa Istanbul for the development of Islamic Capital Market products. He stated:
We are delighted as Borsa Istanbul to host this important Consultative meeting and we are devoted to the development of the Islamic Financial Sector, the Precious Metals Market and the Capital Markets. Therefore we trust this meeting to be beneficial for all the participants and we hope for a fruitful outcome.
Ijlal Ahmed Alvi, Chief Executive of the IIFM, who chaired the meeting, said:
This consultative meeting is a first step in achieving the common goal of developing a suite of Shari’ah-complaint standard documentation and product confirmations for use by institutions who are already active in Islamic finance as well as those who are looking to expand services in Shari’ah-complaint gold related asset class. We are greatful to Borsa İstanbul for hosting this important meeting and to all the participants for their valuable input and guidance. The outcome of the meeting will enable IIFM and World Gold Council to assess and prioritize the standardization of certain gold related documentation and products to be developed in the next phase.
The World Gold Council and the IIFM are working closely to develop and promote standardised product and transaction documentation in respect of Shari’ah-compliant gold products. These products (and their associated transactions) include:
- Physical vaulted gold / physical gold investment accounts;
- physical gold regular savings plans;
- physical gold certificates;
- physical gold ETFs;
- and physical gold undertakings.
The creation of a suite of standarised documentation will facilitate the establishment of a broader range of saving, hedging and diversification products, enabling Islamic banks and other financial institutions to grow their customer bases.