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
BNP Paribas becomes first French OTC Clearing member
20 September 2017 | Hong Kong | Reporter: Barney Dixon
BNP Paribas has joined OTC Clearing Hong Kong, as the clearinghouse’s 17th member, and the first from France
Ten-year T2S saga comes to an end
19 September 2017 | Brussels | Reporter: Stephanie Palmer
The Target2-Securities pan-European harmonised settlement platform is finally fully operational, as the Spanish and Baltic markets completed their migration yesterday
SEC praises “smooth” T+2 transition
12 September 2017 | Washington DC | Reporter: Stephanie Palmer
SEC chair Jay Clayton said the move on 5 September “represents a significant accomplishment” for the industry
Citi and Deutsche Bank execute first SwapAgent trades
07 September 2017 | London | Reporter: Jenna Lomax
LCH’s new SwapAgent service has completed its first trades, facilitating an interest-rate swap and an inflation swap between Citi and Deutsche Bank
North America slims down to T+2
05 September 2017 | New York | Reporter: Drew Nicol
The shorter settlement timeframe also aligns these markets with the EU, which moved to a T+2 settlement cycle in 2014
GlobalCollateral and CloudMargin to combine forces on settlement
22 August 2017 | London | Reporter: Stephanie Palmer
CloudMargin has entered into an agreement with DTCC-Euroclear GlobalCollateral to connect with its Margin Transit Utility
LCH launches new SwapClear client account
15 August 2017 | London | Reporter: Drew Nicol
Global clearinghouse LCH has introduced a new type of client account within its SwapClear service that allows buy-side clients to deliver collateral directly and retain beneficial title
More clearing and settlement news