An important ETC issuer, has announced that its physically backed precious metals platform is now Shariah compliant. The ETCs are the first Shariah compliant ETCs globally….
The ETCs provide investors access to investments consistent with Islamic principles.The Shariah compliance was sought in response to the rising global demand for ETCs, in particular from the Middle East, North Africa and Asia. The Shariah compliant ETCs are currently traded on 5 exchanges in Europe with trading volumes of $2 billion in July. ETCs are designed to provide simple access to all investors and with the addition of being Shariah compliant, ETCs are now even more accessible to a wider range of investors.
The 5 physical ETCs which are Shariah compliant are:
ETFS Physical Platinum
LSE code: PHPT
ETFS Physical Palladium
LSE code: PHPD
ETFS Physical Silver
LSE code: PHAG
ETFS Physical Gold
LSE code: PHAU
ETFS Physical PM Basket
LSE code: PHPM
All of the physical precious metal ETCs are backed by allocated metal – uniquely identifiable bars which carry no bank credit risk. These precious metal bars and ingots are held in trust in London by the Custodian HSBC Bank USA N.A., the world’s leading Custodian for ETCs.
The metal held with the Custodian must conform to the rules for Good Delivery of the London Bullion Market Association (LBMA) and London Platinum Palladium Market (LPPM). Securities are only issued once metal is confirmed as being deposited into the Company’s bullion account with the Custodian. Consistent with allocated gold, no precious metal is borrowed, loaned out nor does it earn any income.
ETF Securities now offers more than 120 ETCs, which give investors greater choice to implement different investment strategies with the choice of physical, long, forward, leveraged and short exposure to a wide range of commodity sectors. ETCs are simple to access as they are traded in three currencies (Euros, USD and Sterling) and listed on five major European Exchanges including the London Stock Exchange, Euronext Paris, Euronext Amsterdam, Deutsche Borse and Borsa Italiana. Each Exchange has created unique ETC trading segments resulting in trading volumes exploding to $4.8 billion during July.
Commenting on ETF Securities’ Shariah approval, Hector McNeil, Managing Partner at ETF Securities, said: “We are very pleased to be able to offer the first Shariah compliant platform of physical precious metal ETCs in the world. This is an exciting new development for Islamic investors to gain access to our entire physical precious metals platform which includes Gold, Silver, Palladium and Platinum. This development recognises the rising importance of Islamic investors and their appetite for ETCs. “ETCs were designed to be simple and accessible tools for all types of investors. Shariah compliance further extends the global reach of ETCs which are now traded on 5 Exchanges in 3 currencies. The Shariah compliant ETCs have grown to $2.6 billion in the past 14 months with trading volumes of $2 billion in July before this exciting new development.
“To lead this exciting new development in ETCs, ETF Securities has appointed a top class inpidual in Sameer Meralli for the MENA region. Sameer brings a wealth of sales, marketing and commodities experience to the team. Sameer’s extensive Islamic sales and product structuring will significantly strengthen the ETF securities’ offering to MENA and Shariah compliant investors.”