Islamic Finance Platform Reinforced by Appointment of Shariah Supervisory Board by DMCC
In a significant move, DMCC Tradeflow, a leading platform for commodity trade in the UAE, has received certification from prominent Shariah authorities, including the Shariah Supervisory Board, the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), and the UAE Central Bank’s Higher Shariah Authority. This certification underscores DMCC Tradeflow’s commitment to providing Shariah-compliant trade finance solutions within the UAE’s rapidly growing Islamic finance ecosystem.
The certification process involved a thorough review of DMCC Tradeflow’s Islamic finance segment, which has evolved from a warehouse receipt system into a key enabler for commodity trade. The platform now offers various online services tailored specifically for collateral financing, jewelry financing, and Islamic finance solutions. These offerings are designed to facilitate commodity-focused investments and trade finance activities in line with Islamic principles, an area that has become increasingly important given the UAE’s strategic positioning as a global Islamic finance hub.
The significance of this certification lies in strengthening investor and stakeholder confidence in the Shariah-compliance and governance of DMCC Tradeflow's products. This is crucial in attracting capital from Islamic investors globally. Moreover, the certification aligns DMCC’s activities with the broader national strategy for Islamic finance and halal industry development launched by the UAE, which aims to integrate and grow financial services adhering to Islamic law, including banking, Takaful, and Sukuk markets.
Key points highlighting the importance of DMCC Tradeflow’s Islamic finance segment include:
1. The segment enhances DMCC’s role as a regulator and facilitator of commodity trade, incorporating Islamic finance, thereby tapping into a growing demand for Shariah-compliant financial products in emerging markets such as India and China. 2. The segment supports the UAE’s vision to diversify its economy and bolster its status as a leading global hub for Islamic finance, complementing other initiatives like the Dubai Shariah Asset Management joint venture and the Dubai Gold & Commodities Exchange (DGCX) which also focus on Shariah-compliant commerce and investment products. 3. The certification by the Shariah Supervisory Board, AAOIFI, and UAE Central Bank’s Higher Shariah Authority confirms adherence to international Islamic finance standards, which facilitates international trust, compliance, and market expansion at a time when the UAE’s Islamic finance sector is rapidly expanding, with Islamic banks accounting for nearly 23% of total credit in the banking sector.
In 2024, DMCC Tradeflow handled over 201,000 Islamic finance transactions, with a total value of transactions exceeding AED 1.4 trillion. The endorsement is expected to support the expansion of Islamic trade finance activities through the DMCC Tradeflow platform.
To maintain the highest standards in Islamic finance, DMCC has appointed a Shariah Supervisory Board to oversee its Islamic finance operations on the DMCC Tradeflow platform. This appointment reflects DMCC’s commitment to maintaining the highest standards in Islamic finance and offers added assurance to financial institutions.
The current status of DMCC Tradeflow’s Islamic finance segment is notably advanced and significant. Its Shariah-compliant offerings position DMCC as a key player in Shariah-compliant trade finance, enhancing Dubai’s reputation as a global hub for Shariah-compliant financial services. The certification underscores its credibility and opens doors for further growth, positioning it as a vital player in the UAE’s ambition to become a global leader in Islamic finance.
- The certification received by DMCC Tradeflow from prominent Shariah authorities marks a milestone in their business, as it solidifies their position as a key provider of Shariah-compliant trade finance solutions, thus contributing to the growth of the UAE's Islamic finance industry.
- With the demanding and specific nature of Islamic finance, DMCC Tradeflow's commitment to maintaining the highest standards is evident in their appointment of a Shariah Supervisory Board, which oversees their Islamic finance operations on the DMCC Tradeflow platform, thereby attracting more financial institutions and fostering growth in this sector.
