Following the initiative that was launched by the Accounting and Auditing Organization for Islamic Financial Institution (“AAOIFI”) in its cooperation with the World Gold Council and Amanie Advisors in preparing the first detailed Shariah standards on the rules pertaining to gold and its related financial products, the second Shariah sub-committee meeting was held in Dubai, on Saturday, 6th of February 2016.
Earlier, AAOIFI’s Shari’ah Board approved the project and its theme and structure, and formed a subcommittee to conduct a thorough study and prepare a standard drawing, for technical aspects, on expertise of both the World Gold Council and Amanie Advisors.
Dr. Hamed Hassan Merah, Secretary General, AAOIFI stated: “This standard is expected to have a substantial, positive impact as it will help address many issues and questions and will cover a wide spectrum of contemporary applications and crucial fiqh developments, which among others include: the characteristics of gold and its types of sale and rules. The standards will detail out the rules on gold in cases of Ijarah (lease), Qard (loan), Wadi’ah (safekeeping), Wakalah Bil Istithmar (investment agency) and Waqf (endowment). The standard will also explain the rules on the possession of gold, set-off and its related rulings, the rules if it is a type of jewelry, zakat on gold and other Islamic jurisprudence rules which would require a group Ijtihad (independent reasoning) to adduce the Shariah rules pertaining to its contemporary applications”
Aram Shishmanian, CEO of the World Gold Council commented: “We are very pleased with the progress that has been made in the development of the Shariah Standard on Gold so far. Since AAOIFI took on the development of the Standard, we are moving ever closer to greater harmonisation of the rules relating to gold across Islamic financial services. We know there is a desire and demand for Shariah-compliant gold backed products amongst both institutions and individuals, and this Standard will help to meet that need and facilitate the growth of the market.”
Datuk Dr Mohd Daud Bakar, Executive Chairman of Amanie Advisors said: “We are encouraged by the feedback and comments received from AAOIFI and the industry players towards making the Standard more robust, practical and user friendly. This has been the objective all along – making sure that the Standard can be easily applied by market players towards increasing the use of gold as an alternative asset class. Other plans and initiatives are also underway to further facilitate the Islamic finance market in adopting gold as underlying asset in Shariah compliant financial instruments.”