Saudi Tadawul Group Announces its Intention to Launch a Bundle of Enhancements to Develop the Post Trade Infrastructure

RIYADH – 22 March 2022 – Saudi Tadawul Group, through its subsidiaries, today announced its intention to launch a bundle of new enhancements aiming to strengthen the post trade infrastructure and increase its efficiency by providing a more streamlined trading experience, and support market participants to develop a wide range of securities services.

The announcement was made at the Saudi Capital Market Forum which was held for the first time by the Saudi Tadawul Group, under the patronage of HE. Mohammed Elkuwaiz, the Chairman of the Capital Market Authority, brings together issuers, investors, private companies, government agencies and financial institutions for a day of dialogue dedicated to advancing the Saudi capital market.

The new enhancements are introduced by three of Saudi Tadawul Group’s subsidiaries: the Saudi Exchange, Securities Clearing Center Company (Muqassa(, and Securities Depository Center Company (Edaa) .

An overview of the enhancements:

· Saudi Exchange: The introduction of a more efficient handling of order flow by market participants, such as an enhanced mechanism for short selling activities. Further enhancements include buy-in trades executed at the Exchange and settled on the same day (T+0), and for Negotiated Deals, investors will now benefit from a flexible settlement cycle, allowing buyer and seller to agree on a settlement cycle from T+0 to T+5 based on their deal requirements and finally additional flexibility in the trading experience and settlement cycles for securities traded over-the-counter.  

· Muqassa: The extension of clearing services to cover equities, sukuk and bonds, and traded funds markets to adopt a more comprehensive risk framework and facilitate the introduction of new products and services for clearing members. New post-trade services include rectifying trade before settlement, average price trades or split price trade and other enhancements and services. 

·  Edaa: The introduction of a new central securities depository system and post-trade services, in alignment with international standards, to enhance the experience for Capital Market Institutions, custodians, settlement agents and investors. Further enhancements include straight-through processing of ISO messaging as well as the daily and ad-hoc reconciliation and reporting of participants and other enhancements.

The introduction of these enhancements, which are the largest in the history of the Saudi capital market, will provide investors and market participants with a wide range of investment opportunities and enable access to new and diversified financial instruments to manage risk and benefit from market movements. It will enhance investor access, improve risk management tools, and enhance trade and post-trade services for entities operating in the Saudi capital market such as capital market institutions and banks, as part of wider efforts to reinforce the Saudi capital market’s position as a globally attractive investment destination.

Eng. Khalid Al-Hussan, CEO of Saudi Tadawul Group said: “The introduction of these market infrastructure enhancements will foster financial stability and integrity and strengthen the offering of our Group.”

“These enhancements mark a new chapter in the advancement of the Saudi capital market and align it with global best practices. Our aim is to provide local and international investors with a range of investment opportunities that benefit the Saudi economy and reinforce its position as an attractive global investment destination.”

Mr. Wael Al-Hazzani, CEO of Muqassa commented: “the enhancements will enable Muqasaa with the activation of the central clearing services in the main market, parallel market, sukuk, bonds and exchange traded funds today, Muqassa has successfully completed its full coverage of all exchange traded products in the Saudi Exchange. Muqassa will enable the introduction of new products and services in the market and implement international practices clearing services for all products traded in Saudi Exchange, which is an essential step to develop the market and enhance its stability.”

The new enhancements will further propel Saudi Arabia forwards as an emerging market leader, a technologically advanced and attractive global investment destination, and the gateway to the MENA region.

Learn more about all the market infrastructure enhancements please click here