Morgan Stanley Takes Market-Making Lead for 40% of Saudi-Listed Firms

By Abeer Sufyani

Morgan Stanley Saudi Arabia has secured the largest share of market-making activities on the Saudi Exchange (Tadawul), following regulatory approval to act as a market maker for 152 listed companies, covering both the main market and Nomu, the parallel market. The authorization represents approximately 40.1% of all listed firms across the two markets.

Merrill Lynch Saudi Arabia came in second, gaining approval to act as a market maker for 18 listed Saudi companies.

The expansion follows the Saudi Capital Market Authority’s (CMA) approval in December 2022 of new market-making regulations and procedures proposed by Tadawul. The framework aims to regulate market-making activity, including the implications of registration approval and the operational mechanisms for listed securities.

The regulation defines market-making as the provision of continuous buy and sell orders during the open trading session, aimed at improving liquidity in the designated securities. It also outlines eligibility requirements, including mandatory membership in the market or derivatives, the establishment of clear policies that separate market-making from other business activities, and the fulfilment of technical, operational, and cybersecurity standards, as well as any other conditions set by Tadawul and approved by the CMA.

Other licensed market participants include SNB Capital, which provides market-making services for seven companies, Riyad Capital for five firms, and Al Rajhi Capital for one.