DGCX Spot Gold Contract (DGSG) – Shari’ah Compliant

  • DGCX Spot Gold Contract (DGSG) - Shari’ah Compliant

    Gold is one of the oldest and most well-known products used for investment, hedging and trading. Investments in gold have traditionally been used as a hedge against inflation and as a store of value.

    The DGCX Spot Gold contract – Shari’ah compliant, has been certified by renowned Shari’ah scholars in compliance with the Shari’ah principles for the ownership of gold. Gold is less volatile than other major Islamic products available in the market including Equity Indices, REITs and the Takaful index. Although, traditionally Gold has performed better on a medium to long term basis. The DGCX Spot Gold contract – Shari’ah Compliant, provides an opportunity for Islamic funds and investors to diversify their portfolio efficiently by investing in Gold.

    • Compulsory physical delivery of allocated and segregated 1 Kilogram gold bars from approved Refineries
    • Recognised, regulated and fully Shari’ah compliant.
    • Transparent pricing and defined delivery intention, revocation and substitution processes and timelines
    • Traded in USD with a tick size of USD 0.10 per troy ounce and Tick value of USD 3.20 per lot
    • Region’s first Exchange traded Shari’ah Spot Gold contract, certified by reputed Shari’ah advisory board based on established Shari’ah gold standards
    • Enables efficient diversification of Islamic investment portfolios through Shari’ah compliant ownership of gold
    • Traded on a federally regulated and risk managed platform offering safety and price transparency
    • Compulsory physical delivery under approved Shari’ah structure
    • Only specific DGD bars accepted as deliverable brands under the contract
    • End to end solution for physical storage and delivery handling as per participants’ request
  • Contract Specifications

    Contract SpecificationParameters
    Contract Symbol DGSG
    Underlying Gold with minimum purity of 0.995 of allocated and segregated 1 Kilo gold bars
    Contract Size 32 troy ounces. (approx. 1 kg)
    Notional Contract Value 32 x Gold Price quote in US$ per troy ounces
    Spot Gold Intention Notice (SGIN) currency US$
    Settlement Currency US$
    Price Quote US$ per Troy Ounces for gold delivered in an ‘Approved Gold Vault’ at ‘approved Delivery location in Dubai
    Tick Size US$ 0.10
    Tick Value US$ 3.20
    Settlement Basis Compulsory physical delivery
    SGIN Days Monday to Friday
    SGIN Date and Time 0700 to 2000 hours UAE time (GMT+4) on T+0 Day
    Spot Gold Trade Settlement Day and Time 1200 to 1400 hours on T+1 Business Day
    Max Order Size 200 lots
    Minimum Delivery Size 1 Lot
    Initial Margin on Spot Gold Intention Notice Day based on SPAN USD 1,400 per contract, subject to change.
    Spot Gold Trade Settlement Day Margin 5 times the Initial Margin on Spot Gold Intention Notice Day, subject to change
    Spot Gold Settlement Day Unit 1 kilogram of refined gold of minimum 0.995 fineness cast in one bar by an Approved Gold Refiner and located in an Approved Gold Vault, accompanied by the original Refiner's Certificate
    Deliverable Quality Minimum 0.995 pure gold bar
    Spot Gold Trade Settlement Day T+1 Business Day (Monday to Friday)
    Delivery Fee Rates applicable and to be published on the DGCX/DCCC website.
    Spot Gold Trade Settlement Method, Instrument & Location 100% Cash via DCCC, 100% allocated physical Gold via DMCC Tradeflow Warrant at approved vault locations within the Emirate of Dubai and a clear offer and acceptance notice for the exchange between the parties via DCCC as the appointed purchasing/selling agent of the contracting parties.
    Pay-In of Funds / Delivery-In of Gold Pay in of Funds and Delivery-in of Gold DMCC Tradeflow Warrant before 1000 Hours UAE time (GMT+4) on T+1 Business Day. Pay out of Funds and Delivery-out of Gold DMCC Tradeflow Receipts after 1200 Hours and before 1400 UAE time (GMT+4) on T+1 Business Day
    Approved CMI / Assayers Names as listed on the DGCX/DCCC websites
    Approved Brands Names as listed on the DGCX/DCCC websites
    Final Sale Price (FSP) As determined by DGCX at the close of market hours (Refer DGCX Notice # COMP-2008-014 dated April 22, 2008 for further details)
    Wa’d (Undertaking)* Every prospective Buyer and Seller agrees that it submits the Wa’d when initiating Spot Gold Intention Notice as part of submitting SGIN
    Daily Price movement Please see Note 2**

    Note 1: When submitting the Spot Gold Intention Notice (SGIN), each prospective buyer/seller (as the case may be) will agree to have submitted (as part of submitting SGIN) a Wa’d undertaking to bear the differences of price between the price of gold at the time of submitting the SGIN price and the Final Sale Price (“FSP”) for the purpose of entering into the Transaction. This is because, by way of the Rules and regulation of DGCX, the Transaction that will be entered into at T+1 Business Day will have to be based on the FSP which will only be declared by DGCX at T + 0 at close of market hours on respective Spot Gold Intention Notice (SGIN) day.

    ** Note 2: For the avoidance of “fat finger” errors, price band shall be within USD 30 from previous settlement price e.g. if previous settlement price is USD 1,200 then the price band is from USD 1,170 to USD 1,230. If price breaches the daily price movement limit, trading in a particular Contract shall continue, with the new trading price range without any cooling period.