Saudi Stock Exchange (Tadawul) Announces the Commencement of the Central Counterparty (CCP) Company

Within its plans to further develop the Saudi Capital Market by diversifying investment opportunities, and in alignment with Vision 2030, the Saudi Stock Exchange (Tadawul) today announced the commencement of the Central Counterparty Clearing House (“CCP”) for clearing of securities in the Saudi capital market as a closed joint stock company with a capital of SAR 600,000,000.00. 

The CCP will be responsible for developing future clearing services in accordance with the best international risk management practices and standards.

An independent clearinghouse will help to diversify investment opportunities in the market by enabling the introduction of new asset classes such as derivatives and others that will allow investors to diversify their trading strategies and enable Saudi companies to hedge against risks, which will enhance the attractiveness of the Saudi capital market to all investors.

In addition, CCP will improve risk management of the market by introducing new mechanisms to ensure that the settlement is complete and that all parties meet their obligations when settling trades in the market. 

This will further strengthen the current market infrastructure and increase its operational efficiency.

The CCP Board of Directors has appointed Mr. Wael Abdullah Al Hazzani as CCP CEO,. Mr. Al Hazzani has led several functions and number of key projects and programs within Tadawul.

The Capital Market Authority (CMA), Saudi Arabian Monetary Authority (SAMA) and Tadawul have already initiated the required regulatory regime to activate the CCP function, in order to enable it to fully operate by the second half of 2019.