24 April 2017
Reporter: Stephanie Palmer

Saudi stock exchange makes move to T+2

Tadawul, the Saudi Arabian stock exchange, has officially moved to a T+2 settlement cycle for listed securities, from its previous T+0 system.

Effective from 23 April, the change means securities of all types and over-the-counter transactions will be settled within two days of the trade execution date.

In a statement, Tadawul announced that all the necessary pilot phases have been completed successfully, to “ensure full technical and functional readiness and connectivity with market participants”.

Tadawul first gained regulatory approval from the Capital Markets Authority of Saudi Arabia to amend the settlement cycle for listed securities in May 2016. The exchange then published draft rules for public consultation, and later released amended rules.

Amending the settlement cycle is intended to improve asset safety for investors, providing more time for trade verification, and for dealing with errors as and when they arise.

It will unify settlement duration for all types of listed securities, which currently vary, and will align the Saudi stock market with global settlement practices, opening up new opportunities among other market indices.

The move is also part of plans to develop an investment environment that better supports institutional investments, and to allow for securities lending and borrowing and short selling in the market.

The date of the move to a T+2 cycle was announced a month in advance, on 23 March. Ahead of the switch, trading was suspended for any listed securities that previously settled after two business days.

In place on 19 and 20 April, the suspension for these securities was to ensure there were no suspended transactions ahead of the T+2 implementation. Trading resumed on 23 April.

More clearing and settlement news
The latest news from Asset Servicing Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Caceis gains ICF bank trading platform mandate
21 December 2017 | Frankfurt | Reporter: Zsuzsa Szabo
Caceis has received a mandate from ICF Bank to be the settlement agent for the Frankfurt-based bank’s Quotrix platform
LCH establishes clearing of credit index options
20 December 2017 | London | Reporter: Jenna Lomax
The central counterparty is the first clearinghouse to implement a risk framework specifically for the clearing of credit index options
Post-trade upgrade on the cards for Saudi Stock Exchange
07 December 2017 | Riyadh | Reporter: Jenna Lomax
Nasdaq will replace Tadawul’s current post-trade registry, depository, clearing and settlement solution
CSD Prague opens a direct account in Euroclear Bank SA/NV
05 December 2017 | Frankfurt | Reporter: Drew Nicol
The account will allow the central securities depositary to access a wider range of services and to have access to many additional foreign markets, according to Euroclear
Japan earmarks Q2 2019 for T+2 settlement shift
07 November 2017 | Tokyo | Reporter: Drew Nichol
Japan has unveiled a “tentative” timeline for its exchanges’ shift from a T+3 to T+2 settlement cycle, with eye towards Q2 2019
Iberclear bank on Citi to provide global custody
20 October 2017 | Madrid | Reporter: Jenna Lomax
The agreement, signed at this years Sibos conference in Toronto, will enable Spanish clearing houses to settle international securities via local CSDs
Eurex Clearing launches partnership programme
09 October 2017 | Frankfurt | Reporter: Theo Andrew
The programme plans to build a “balanced ecosystem”, responsible for aligning responsibilities and benefits related to economics and governance, bringing “greater choice and transparency” to the market
More clearing and settlement news