Tadawul rolls out bundle of enhancements to develop post trade infrastructure

Saudi Tadawul Group will roll out a bundle of enhancements to develop post trade infrastructure, supporting the continuous development of the Saudi capital market into a technologically advanced, diverse and integrated capital market

Saudi Tadawul Group has announced its intention to launch a bundle of enhancements to develop the post trade infrastructure.

The enhancements are the largest in the history of the Saudi capital market and intend to provide investors with increased investment opportunities and access to a diverse range of financial instruments and new products.

As part of Saudi Tadawul Group’s ongoing commitment to innovation and alignment with international best practices, this new wave of enhancements further supports the continuous development and advancement of the Saudi capital market.

Several new market infrastructure enhancements

The Group and its subsidiaries will capitalize on the benefits of these enhancements to deliver best-in-class services and financial instruments to local and international investors creating an attractive investment environment.

Saudi Exchange: Several enhancements including the introduction of a more efficient handling of order flow by market participants, such as an enhanced mechanism for short selling activities, which provides an efficient and dynamic mechanism for market participants.

Further enhancements include:

Buy-in trades executed at the Exchange and settled on the same day (T+0),

Investors will now benefit from a flexible settlement cycle for Negotiated Deals, allowing buyer and seller to agree on a settlement cycle from T+0 to T+5 based on their deal requirements.

Additional flexibility in the trading experience and settlement cycles for securities traded over-the counter.

Muqassa: Several key enhancements including the extension of clearing services to cover all securities traded on Saudi Exchange to adopt a more comprehensive risk framework and to facilitate the introduction of new products and services.

Further enhancements include:

Enabling Capital Market Institutions (CMIs) and banks to benefit from an enhanced degree of clearing service offering Muqassa membership • Extended post-trade services.

Adoption of a comprehensive risk management framework

Edaa: Several key enhancements including the introduction of a new central securities depository system and post-trade services, in alignment with international standards, to enhance the experience for CMIs, custodians, settlement agents and investors.

Further enhancements include:

Straight-through processing of ISO 15022 messaging.

Daily and ad-hoc reconciliation and reporting of participants.

Mohammed Al Rumaih, CEO of Saudi Exchange said “As one of the largest exchanges in the world and one of the largest among our emerging market peers, we have a responsibility to uphold international standards and implement global best practice. We are proud to upgrade the investor experience on the Exchange by continually advancing the product and service offering, as we strive to raise the bar for the benefit of all market participants.”

Commenting on these measures, CEO of Saudi Tadawul Group Eng. Khalid Al-Hussan said “The introduction of these new enhancements will further support our aim to develop a technologically advanced capital market on a par with global capital markets. The new enhancements will allow us to not only expand our offering but also strengthen our connectivity and respond to the rapid changes in international financial markets. As we continue to address both local and international investors’ needs, we are continuously reinforcing the Saudi capital market’s position as an attractive global investment destination.”