Proposed Model
According to the reports published by international institutions, including International Monetary Fund (IMF), Food and Agriculture Organization (FAO), etc, commodity certificate of deposit is a quite common financial instrument in developed countries and also in a number of developing countries. This is while Iran has not taken any proper measure in this regard. However, the world experience shows that using commodity CDs for finance is a vital approach for agriculture sector and could be used for execution of guaranteed price policy although it is very important for all economic sectors, including petrochemical, steel and other industries.
To put this into operation, Iran Mercantile Exchange considers warehouses across the country then people deliver their own commodities or other types of asset, including industrial or agricultural products, precious metals or foreign currencies to these warehouses or other standard storage places and receive warehouse receipts on which the specifications regarding the quality and quantity of the stored or deposited commodity or asset are stated. Then the owner of commodity or asset, with coordination with the warehouse and the Central Depository and Settlement Company, gives the receipt and receives the commodity or foreign currency certificate of deposit which is a security indicating the ownership of the holder on a particular amount of a commodity or foreign currency, and supported by the standard warehouse receipt issued by the warehouses certified by the SEO. By the issuance of the warehouse receipt, the owner of receipt may offer the security in the exchange or in the OTC and sell the security through a quite transparent and competitive mechanism and gets liquidity.
The whole procedures for Transactions of Commodity and Foreign Currency CDs are as follows:
Issuance of permits for standard warehouses and storing places by the exchanges and OTCs following the required qualifications;
Deposition of commodities or foreign currencies to the standard warehouses and storing places;
Submitting the electronic warehouse receipt in the name of the commodity or foreign currency owner to the CSDI;
Registration and deposition of the warehouse receipt with the CSDI;
Issuance of commodity or foreign currency CDs;
Offering and trading of commodity CDs in the exchange or OTC;
Connection between the exchanges and OTC trading system with the CSDI system, transfer of CDs ownership and settlement.

Shariah Board Resolution
Commodity CD is a security indicating the ownership of the holder on a particular amount of a commodity or foreign currency supported by the standard warehouse receipt issued by the warehouses certified by the SEO.
Selling of commodity or foreign currency CDs in the primary market means the selling of stored or deposited commodity or foreign currency by the owner, and buying of these CDs means the buying of such commodity or foreign currency; so, in jurisprudential point of view this is a kind of bai ’ (sale).
Secondary market of commodity or foreign currency CDs means reselling of commodity by the seller (first buyer) to the second buyer which would be permissible upon observing particular religious condition and orders of bai’ (sale).
As the commodity or foreign currency CD indicates the ownership of the asset stored in the standard warehouse or storing place, the collateralization of which would be of no problem.
Issuance of commodity CDs would be executable for foreign currencies and all other commodities with long durability in standard warehouses or storing places, including petrochemical and agricultural products and metals; so, by depositing such commodities and foreign currencies, investor can receive the certificate of deposit and trading of such certificates in the primary or secondary market would be permissible by observing the conditions of bai’ (sale).
Sessions
Session Number Session Date Description
122 Feb 17 2016
123 Mar 02 2016

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