Update 1 islamic finance group approves standard for gold products

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(Updates with comments)By Bernardo VizcainoNov 28 The Bahrain-based group that issues guidelines generally followed by Islamic financial institutions has approved a sharia standard for gold-based products in a bid to expand the use of bullion in Islamic finance. Traditionally, gold has been viewed as a currency in Islamic finance, confining it to spot trades in fixed weights and measures. Investors have been unable to speculate on its future value and there has been no clear policy on how to trade gold. The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) approved the final version of its new standard on gold and trading controls last week and an official launch will be announced soon, it said in a statement. The new standard addresses issues such as collateral, set-off, screening and the exchange of gold in spot and deferred transactions. Sharia compliant products backed by gold could include exchange-traded funds and savings accounts.

AAOIFI issues guidelines that are followed wholly or in part by Islamic financial institutions across the world, so its efforts would help align the industry to global practices. Uncertainty about how gold can be used in Islamic finance has kept sharia-compliant bullion transactions at a minimum, Matthew Keen, founder of Dubai-based precious metals consultancy Evidens and an adviser to the World Gold Council, said. London-based ETF Securities, for example, launched a sharia-compliant exchange-traded commodity product for gold, silver, platinum and palladium in 2008 but it never gained traction.

"There is such a lack of understanding of what sharia law would mean in terms of gold investing and this standard would at least provide a common ground," ETF Securities director of commodity research Nitesh Shah said."However, this is not going to be a game changer for global gold consumption," he said, as sharia law does not prohibit the ownership of gold jewellery or coins.

The final standard will be made available on a complimentary basis by AAOIFI and the World Gold Council ; var median = (relatedItemsTotal / 2); var $relatedContentGroupOne = $('.related-content.group-one ul'); var $relatedContentGroupTwo = $('.related-content.group-two ul'); $.each($relatedItems, function(k,v) { if (k + 1 = median) { $relatedContentGroupOne.append($relatedItems[k]); } else { $relatedContentGroupTwo.append($relatedItems[k]); } }); } else { $('.third-article-divide').append($('div class="related-content group-one"h3 class="related-content-title"Also In Basic Materials/h3ul/ul/div')); $('.related-content ul').append($relatedItems); } },500); } Next In Basic Materials Zambia Vedanta mine workers strike over delayed pay talks -union LUSAKA, Jan 4 Zambian workers have downed tools at a mine and copper processing plant belonging to Konkola Copper Mines (KCM), a unit of Vedanta Resources, in a dispute over the pace of wage talks, a union official said on Wednesday. Alcoa to close Suralco refinery in Suriname Jan 3 Alcoa Corp said it would permanently close its Suralco alumina refinery and bauxite mines in Suriname, more than a year after stopping production at the plant. UPDATE 1-ETFs globally gather record cash in 2016 -BlackRock NEW YORK, Jan 3 Investors funneled $375 billion into exchange-traded funds in 2016, investment manager BlackRock Inc said on Tuesday, a global record that came as investors looked to cut costs. MORE FROM REUTERS window._taboola = window._taboola || []; _taboola.push({ mode: 'organic-thumbnails-a', container: 'taboola-recirc', placement: 'Below Article Thumbnails - Organic', target_type: 'mix' }); Sponsored Content @media(max-this site) { #mod-bizdev-dianomi{ height: 320px; } } From Around the Web Promoted by Taboola window._taboola = window._taboola || []; _taboola.push( { mode: 'thumbnails-3X2', container: 'taboola-below-article-thumbnails', placement: 'Below Article Thumbnails', target_type: 'mix' } ); window._taboola = window._taboola || []; _taboola.push