German capital market firm Deutsche Börse Group-owned post-trading services provider Clearstream will connect the Saudi capital market to its network through a linkage with the Securities Depository Center Company (Edaa), a wholly-owned subsidiary of Saudi Tadawul Group.
Clearstream is the first ICSD to offer international investors access to the Saudi capital market. Its eligible clients will be able to access and trade on the Saudi Exchange beginning June 14, 2021, through an indirect linkage with HSBC Saudi Arabia, which will function as Clearstream’s local custodian.
This step will give international investors seamless access to the Saudi capital market by enabling settlement of Saudi Exchange-listed government bonds, non-convertible corporate bonds, and ETFs denominated in Saudi Riyal (SR).
The linking comes after the Saudi Capital Market Authority (CMA) has approved Edaa’s international central securities depository (ICSD) guidelines, intending to create a consistent regulatory framework that follows international best practices.
“We are keen to partner with a leading post-trade services provider as we seek to create strong links with global depositary centers to introduce advanced services for market participants. The linkage with the International Central Securities Depository Clearstream reflects our efforts to facilitate the access of international investors to the Saudi capital market, while strengthening bridges between local issuers and international investors, especially in regards to debt instruments listed on the Saudi Exchange, this is in line with the objectives of the Financial Sector Development Program, part of Vision 2030.”
“The Saudi capital market has been increasingly attractive to international investors. We are excited to now offer our clients access together with excellent market partners with great local reach. Adding the Saudi market to our network is a further token of Clearstream’s commitment to supporting emerging capital markets in their integration into the global financial system, creating further investment opportunities backed by our trusted, high-quality service offering,” said Mr. Jan Willems, Head of Global Markets at Clearstream.
The Saudi Exchange is the largest in the Gulf Cooperation Council (GCC) region, one of the top ten stock exchanges globally, and one of the top three largest emerging market exchanges with a market value of more than $2.5 trillion.