Saudi Tadawul Group clarifies enhancements to develop post-trade infrastructure

Logo of Saudi Tadawul Group

Saudi Tadawul Group, through its subsidiaries, announced today, March 22, 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 new enhancements are introduced by three of Saudi Tadawul Group’s subsidiaries: Saudi Exchange (Tadawul), Securities Clearing Center Co. (Muqassa(, and Securities Depository Center Co. (Edaa).

In Saudi Exchange, the new enhancements cover 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). 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.

For Muqassa, clearing services will be extended 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.

Moreover, a new central securities depository system and post-trade services will be introduced in Edaa, 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 domestic capital market such as capital market institutions and banks, as part of wider efforts to reinforce the Kingdom’s capital market’s position as a globally attractive investment destination.

Click to read the market infrastructure enhancements: