Saudi Arabia announces sukuk and bonds market enhancements

In a joint effort to further develop the Saudi capital market, the Capital Market Authority (CMA), the Saudi Stock Exchange (Tadawul) and the Debt Management Office (DMO) on Thursday unveiled a number of enhancements to the fees and commissions’ structure of the Sukuk and bonds market.

According to the enhancements, fees and commissions will be restructured for Sukuk and Bonds’ services that will include new key changes in fees and commissions for issuers, members, and investors, a Tadawul statement said.

According to the changes, Sukuk and bonds issuers will benefit from Edaa’s reduced IPO file upload fees and annual registry fees.

Also, the changes include reducing Tadawul’s annual listing fees for first and subsequent issuances of Sukuk and bonds in addition to introducing caps for Tadawul’s annual listing fees for first and subsequent issuances.

The DMO has also announced reducing the par values of governmental issued Sukuk from SAR one million to SAR 1,000.  

The changes for market members and investors will include deregulation of brokerage commissions and elimination of the minimum commission cap required.

Trading commissions for Tadawul and CMA have also been reduced and CMA will waive the trading commission on all types of investors with the exception of special cases.

Edaa will introduce annual safekeeping fees for listed Sukuk and bonds holdings to further support trading in the secondary market, including financing activities like securities lending and repurchase agreements to maximize the return on assets and recover the value of holdings.

“This restructuring of fees showcases this cooperation to stimulate development of the debt market and encourage sukuk and bonds issuance and trading,” Mohammed Al Kuwaiz, Chairman of the CMA, said.

“These changes represent an important step in further enhancing the Kingdom’s capital market by encouraging issuers to list more Saudi currency sukuk and bonds in the public debt market and facilitating increased trading by investors which will result in greater market liquidity,” Khalid Al Hussan, CEO of Tadawul, said.

“Increased liquidity of the debt market will, in turn, contribute to the issuance of more diversified debt instruments and introduction of new asset classes for investors,” he added.