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Shari’ah-compliant Forward Exchange Contracts (FEC)

Shari’ah-compliant Forward Exchange Contracts (FEC)

The first Shari’ah-compliant FEC in South Africa to be contracted under the ISDA (International Swaps and Derivatives Association) Tahawwut Framework. This product allows you to hedge out your real foreign exchange (FX) risks in a Shari’ah-compliant manner.



Some of the Benefits

Contract options

The product is available with fixed, partially or fully optional contracts

Award-winning platform

The Shari’ah FEC is available through our award-winning eMarket trader platform

Currencies

All major currencies are available

Real-time

Trade in real-time by integrating into our Business Online platform
Key features

The main differences between a conventional ISDA and the Tahawwut ISDA can be summarised as follows:

  • A conventional ISDA can be utilised for speculative purposes. The Tahawwut ISDA contains a clause where the counter parties to the agreement acknowledge that this agreement will not be utilised for speculative purposes.
  • In a Shari’ah FEC, the actual purchase and sale of the FX takes place at the maturity date. On the booking date, it is only a promise to enter into a purchase agreement on the maturity date.
How to get it
  • Key features
  • How to get it

The main differences between a conventional ISDA and the Tahawwut ISDA can be summarised as follows:

  • A conventional ISDA can be utilised for speculative purposes. The Tahawwut ISDA contains a clause where the counter parties to the agreement acknowledge that this agreement will not be utilised for speculative purposes.
  • In a Shari’ah FEC, the actual purchase and sale of the FX takes place at the maturity date. On the booking date, it is only a promise to enter into a purchase agreement on the maturity date.
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