The World Gold Council (WGC) and Dubai Multi Commodities Center (DMCC) formed partnership to launch fully Shariah-compliant Dubai Gold Shares with the intent to list them on the Dubai International Financial Exchange (DIFX), subject to the Dubai Financial Services Authority's (DFSA) approval under the trading symbol “GOLD.” DMCC aims to operate and manage this initiative through Dubai Commodities Asset Management (DCAM), a 100 percent DMCC-owned UAE-based investment company set up last month. DCAM has been established with the objective to develop and seed commodity-linked investment products for distribution in the UAE and other markets. DCAM and the WGC will establish a joint venture company (Dubai Gold Investments - DMCC) ahead of launching the Dubai Gold Shares. Dubai Gold Shares will provide investors with secure, low-cost access to owning gold bullion without the additional costs normally associated with insuring, storing and transacting in physical gold. Each security will allow investors to gain exposure to precise amounts of specifically identified and exclusively-owned gold bullion, and provides investors, for the first time, with the opportunity to trade holdings in gold bullion on the DIFX in a Shariah-compliant manner. Dubai Gold Shares will form an integral part of the Exchange Traded Gold (ETG) family of products, established as a result of an initiative by the World Gold Council, the marketing organization funded by the world's leading gold mining companies. Gold held by products in the Exchange Traded Gold stable now exceeds US$24.2bn, or 806 tons as of 31 March 2008, and represents more than 86 percent share of the market for this category of security. Securities within the ETG family are currently listed on the London, New York, Johannesburg and Australian stock exchanges, with secondary listings in Mexico, Singapore, Euronext Paris, Deutsche Boerse and on Borsa Italiana. James Burton, chief executive officer, WGC, said: “It is the long-term mission of Exchange Traded Gold, supported by the World Gold Council, to remove the barriers to investing in gold across the globe. Our partnership with the DMCC brings together our collective strengths to allow institutions and individuals seeking Shariah-compliant financial products a simple, secure and efficient method of accessing physical gold without having to compromise on their Islamic principles.” Ahmed Bin Sulayem, executive chairman, DMCC, said: “Dubai Gold Shares will bring about increased transparency in Dubai's gold markets, and will give a significant boost to Dubai's position as a leading financial center. More importantly, it will ensure greater integration between the physical and financial markets and will meet the increased investor appetite for gold.” The introduction of Dubai Gold Shares is a milestone for the product class, as it is the first dollar-priced security of its kind to be fully Shariah compliant. The physical gold bars backing the product will be of Dubai and London Good Delivery Standard, and held in the vaults of the custodian, DMCC, and sub-custodian, HSBC. To ensure that Dubai Gold Shares are wholly Shariah compliant, WGC and DMCC have retained Shariah Capital as Shariah advisor. Shaykh Yusuf Talal DeLorenzo, chief Shariah officer of Shariah Capital, will enlist a dedicated board of Shariah scholars whose role will be to review contracts and agreements relating to the Dubai Gold Shares and ensure that these are consistent with the principles of Islamic jurisprudence. Moaz Barakat, WGC's managing director for the Middle East, Turkey and Pakistan, added: “Dubai is well known as a major hub and a strong local physical gold market. The total gold imports for the year 2007 reached 559 tons. We believe that this product will attract investors from all over the world and specifically from Islamic countries.” Ian MacDonald, executive director - Gold and Precious Metals, DMCC, said: “DMCC has always kept track of investor interest and worked closely with all stakeholders to grow and enhance the trade in all commodities, including gold. Having streamlined the physical and market infrastructure for the trade, we are now focusing on developing the financial infrastructure that will enable investors to buy, hold or sell physical gold conveniently through an exchange instrument, backed by allocated gold held in a vault.” __
