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Capital Market Overview


 

Exchange Information

Item Description
Currency Saudi Riyal (SAR)
Time Zone UTC + 3
Exchange The Saudi Exchange is a joint stock company and the sole entity currently authorized in the Kingdom to act as the Securities Exchange (the “Exchange”), carrying out listing and trading in securities. The Exchange is also the official source of all market information. Saudi Exchange is an affiliate member of International Organization of Securities Commissions (IOSCO), and a member of the World Federation of Exchanges, Arab Federation of Exchanges (AFE).
CCP Securities Clearing Center Company “Muqassa” as a closed joint stock company fully owned by the Saudi Tadawul Group, in accordance with the Saudi Companies Law issued by Royal Decree No. M/3 dated 28/01/1437 – 11/11/2015, is carrying out clearing of securities.

 

Depository

The Depository Center Company (SDC) as a closed joint stock company fully owned by Tadawul and the sole entity authorized in the Kingdom to act as the Securities Depository Centre (the “Centre”), carrying out deposit, transfer, settlement, and registry of ownership of securities traded on the Exchange

The legal status, duties, and responsibilities of the Exchange and Depository Center are explicitly defined in the Capital Market Law (the “CML”) issued by Royal Decree Number (M/30) dated June 16, 2003. 

Trading System Saudi Exchange currently operates NASDAQ’S X-Stream INET trading system. The system is regarded among the top trading platforms globally. Securities listed on the Exchange are traded by way of order matching according to price, and then time priority. Transactions are executed through Exchange Members, each on behalf of its clients or itself.
Clearing System Muqassa currently operates Nasdaq`s CCP system.
Depository and Settlement System NASDAQ CSD.
Surveillance System SMARTS Surveillance by NASDAQ.
Security Identifiers ISIN (International Securities Identification Numbering).

Regulatory Landscape:

Relevant Regulatory and Supervisory Bodies Description
Capital Market Authority(CMA) The Capital Market Authority (“CMA"), established pursuant to the Capital Market Law, The CMA is a government organization with financial, legal and administrative independence. It reports directly to the president of the council of ministers. The CMA’s functions are to regulate and develop the Saudi Capital Market by issuing required rules and regulations for implementing the provisions of Capital Market Law. The basic objectives of the CMA are to create an appropriate investment environment, boost confidence, and reinforce transparency and disclosure standards in all listed companies, and moreover to protect investors and dealers from illegal acts in the market. CMA is a member of IOSCO.
Saudi Central Bank (SAMA) The Saudi Central Bank (“SAMA") is the regulator of the banking, insurance, and financing sectors. SAMA is the national central bank and is a member of the Bank for International Settlements, the Committee for Payments and Market Infrastructures and the Basel Committee for Banking Supervisors.
Ministry of Commerce (MC) The Ministry of Commerce (“MC") is working to enhance the potentials of both commerce and investment sectors and protect the beneficiaries' interests, by developing and implementing effective and efficient policies and mechanisms, which will contribute to achieving sustainable economic development.
Ministry of Investment (MISA) The Ministry of Investment of Saudi Arabia (“MISA") is responsible for following up and assessing investment performance, alleviating the difficulties encountered by investors, conducting studies and research and drafting executive plans to stimulate local investments.
Saudi Organization for Charted and Professional Accountants (SOCPA) The Saudi Organization for Charted and Professional Accountants (SOCPA) operates under the supervision of the Ministry of Commerce in order to promote the accounting and auditing profession and all matters that might lead to the development of the profession and improve its status.
Zakat, Tax and Customs Authority  Zakat, Tax and Customs Authority is a government agency reporting to the Ministry of Finance responsible for assessing and collecting tax from persons subject to taxation.

Exchange Traded Instruments:

Opening Days Opening Auction Continuous Trading Closing Auction Trade-At-Last SETTLEMENT CYCLE (Order Book Trades) Minimum Lot Total Trading Commission Security Format
Exchange Traded Instruments
Equities (MAIN MARKET & NOMU – PARALLEL MARKET)
Sunday - Thursday 09:30–10:00* 10:00– 15:00 15:00-15:10* 15:10-15:20 T + 2 1 Share 15.5 bps Electronic Form
Sukuk / Bonds
Sunday - Thursday 09:30–10:00 10:00– 15:00 - T + 2 Depending on issuance terms & conditions Trading commission: 1 bps**
Brokerage services fees: no minimum or maximum fee
Electronic Form
Right Entitlements
Sunday - Thursday 09:30–10:00* 10:00– 15:00 15:00-15:10* 15:10-15:20 T + 2 1 Right 15.5bps Electronic Form
ETFs
Sunday - Thursday 09:30–10:00* 10:00– 15:00 - T + 2 1 Unit 15.5bps
 
Electronic Form
REITs
Sunday - Thursday 09:30–10:00* 10:00– 15:00 15:00-15:10* 15:10-15:20 T + 2 1 Unit 15.5 bps Electronic Form
CEFs
Sunday - Thursday 09:30–10:00* 10:00– 15:00 15:00-15:10* 15:10-15:20 T + 2 1 Unit 15.5 bps Electronic Form
Negotiated Deals
A trade in which seller and buyer determine the quantity and price (within the daily fluctuation limits) of the listed securities involved in the transaction. Negotiated Deals must comply with the minimum trade size based on the security tier disclosed on the Exchange’s website. Negotiated Deals may be executed during the Second Session (Continuous Trading) and at Closing Price in the Fourth Session (Trade-at-Last). The settlement cycle for Negotiated Deals transactions may be between T+0 and T+5, as determined by the Buyer and Seller. Unless specified, the default settlement cycle for Negotiated Deals transactions is T+2. .
 
Derivatives ( Index Future)
Sunday - Thursday 09:00–09:30 09:30– 15:30 NA(LTP) T + 0 One contract SAR 25 Electronic Form
Relevant Regulations
The Capital Market Authority Regulations  The Saudi Stock Exchange Regulations

For more information related to the relevant regulations please press here

For more information related to the relevant regulations please press here

* + 30 seconds variable uncross

** The trading commission is reduced to 0.5 bps for both the seller and the buyer until 2022/12/31.

Equity Market Features (MAIN MARKET & NOMU – PARALLEL MARKET):

Opening Price

Auction based on the bids and asks entered during the Opening Auction. The market will open and uncross on a variable basis between 10:00:00am and 10:00:30am every day.

Closing Price

Auction based on the bids and asks entered during the Closing Auction. Market closing time is random. The market will close and uncross on a variable basis between 15:10:00 and 15:10:30 every day.

Short Selling

Any sell of a listed security which is borrowed sufficiently to match the sell order, or the seller has an exercisable and unconditional rights to borrow in accordance with the SBL Regulations.

Short selling is permitted for all investors. All listed securities are eligible for short selling activities, with the exception of Tradable Rights in line with the thresholds as defined in the Short Selling Regulations.

Tick Sizes

Price Bands Tick Size
Below SAR 10 SAR 0.01
SAR 10 to SAR 24.98 SAR 0.02
SAR 25 to SAR 49.95 SAR 0.05
SAR 50 to SAR 99.90 SAR 0.10
Above SAR 100 SAR 0.20

 Order Types

  • Limit Orders
  • Market Orders

Order Conditions

  • Hidden Orders (Minimum size must be 50,000 shares, and 5% is the minimum disclosed of quantity)
  • Fill and  Kill Orders
  • Fill or Kill Orders

Order Validity

  • Day Orders
  • Session Orders
  • Good Till Date Orders
  • Good Till Cancel Orders

Normal Trade Size

An executed trade with a value more than 15,000 SAR in the Main Market and 2,500 SAR in Nomu – Parallel Market.

Fluctuation Limits

  Main Market Nomu-Parallel Market
Equities SUKUK / BONDS ETF
Daily Price Fluctuation Limits

Daily Price Fluctuation Limits is ±30% based on the previous day closing price or the listing price in the case of the first day of trading after listing.
 

±30% is applicable only during the first 3 days of trading newly listed Equities, Real Estate Investment Traded Funds and Closed-ended Investment Traded Funds.

On the fourth day of trading:
The Daily Price Fluctuation Limit will revert to ±10%.

N/A ±10% Daily Fluctuation Limit based on the previous day closing price.

Daily Price Fluctuation Limits is ±30% based on the previous day closing price or the listing price in the case of the first day of trading after listing.

 

±30% Daily Price Fluctuation Limits applies to all listed securities on Nomu.

 

 

Static Price Fluctuation Limits


Static Price Fluctuation Limits to be set at ±10%. for the first three days of trading newly listed Equities, Real Estate Investment Traded Funds and Closed-ended Investment Traded Funds.

On the fourth day of trading:
No Static Price Fluctuation Limit is applied.

N/A N/A Static Price Fluctuation Limits of ±10% will apply on an ongoing basis for all listed securities on Nomu.

Market Indices

  • Tadawul All Share Index (TASI)
  • Parallel Market Capped Index (NomuC)
  • Energy
  • Materials
  • Capital Goods
  • Commercial & Professional Svc
  • Transportation
  • Consumer Durables & Apparel
  • Consumer Services
  • Media and Entertainment
  • Retailing
  • Food & Staples Retailing
  • Food & Beverages
  • Health Care Equipment & Svc
  • Pharma, Biotech & Life Science
  • Banks
  • Diversified Financials
  • Insurance
  • Telecommunication Services
  • Utilities
  • REITs
  • Real Estate Mgmt & Dev't

Index Calculation Method

(Current day’s total free float market capitalization ÷ previous day’s total free float market capitalization) x index value from the previous day.

Detailed Index Methodology document is available here: Tadawul Indices Methodology

Companies with Accumulated Losses Framework

Flag Accumulated Company Loss Percentage Settlement
 
20% to less than 35% of its capital T + 2
 
35% to less than 50% of its capital T + 2
 
50%or more of its capital T + 2

Accessibility By Market Participants:

‘Onshore’ Investors
Asset Classes Secondary Market Access Channel Voting Rights Public Offering Participation Private Placement Participation Capital Gains Tax/Zakat With-holding Tax Other Restrictions
Saudi Investors
Equities Direct Access Yes Unrestricted





Restricted to Sophisticated Investors
0% 0%

Prospectus
Terms & Conditions

Issuer Bylaws

Regulator Policies
CEF Direct Access Yes Unrestricted 0% 0%
REITs Direct Access Yes Unrestricted 0% 0%
Sukuk / Bonds Direct Access NA Unrestricted 0% 0%
Mutual Funds Fund Manager NA 10% of AUM 0% 0%
ETFs Direct Access NA Unrestricted 0% 0%
Resident Foreign Investors & GCC Resident Investors
Equities Direct Access Yes Restricted





Restricted to Sophisticated Investors
0% 0%


Prospectus
Terms & Conditions

Issuer Bylaws
Regulator Policies
CEF Direct Access Yes Restricted 0% 0%
REITs Direct Access Yes Restricted 0% 0%
Sukuk / Bonds Direct Access NA Unrestricted 0% 0%
Mutual Funds Fund Manager NA 10% of AUM 0% 0%
ETFs Direct Access NA Unrestricted 0% 0%
‘Offshore’ Investors
Asset Classes Secondary Market Access Channel Voting Rights Public Offering Participation Private Placement Participation Capital Gains Tax/Zakat With-holding Tax Other Restrictions
GCC Corporates (= 51% GCC Ownership)
Equities Direct Access Yes Restricted





NA
0% 5%


Issuer Bylaws


Regulator Policies
CEF Direct Access Yes Restricted 0% 5%
REITs Direct Access Yes Restricted 0% 5%
Sukuk / Bonds Direct Access NA Unrestricted 0% 5%
Mutual Funds Fund Manager NA 10% of AUM 0% 0%
ETFs Direct Access NA Unrestricted 0% 0%
Non-Resident Foreign Investors
Equities Direct / Indirect Yes Restricted





NA
0% 5%

Prospectus
Terms & Conditions
QFI Limits
Issuer Bylaws

Regulator Policies
CEF Direct / Indirect Yes Restricted 0% 5%
REITs Direct / Indirect Yes Restricted 0% 5%
Sukuk / Bonds Direct NA Unrestricted 0% 5%
Mutual Funds Fund Manager NA 10% of AUM 0% 0%
ETFs Direct NA Unrestricted 0% 0%

Corporate Governance and Issuers Disclosure:

Item Description
Corporate Governance Market regulators have focused on the need for better corporate governance via legal and institutional reforms. These included passing the Corporate Governance Regulations ("CGR") issued by the Capital Market Authority pursuant to Resolution No. 1/212/2006 dated 21/10/1427H (corresponding to 12/11/2006G) which have been put into place to reflect international best practices, and further strengthen corporate oversight functions across issuers within the securities market.
Ultimately, robust corporate governance practices ensure that shareholders obtain all privileges pertaining to the ownership of shares in any given company. Specifically such privileges include the right to; obtain a share of corporate dividends, company assets in case of liquidation, attend and participate in shareholder assemblies and deliberations, vote on its decisions, monitor board of directors’ performance and file lawsuits against its members. Shareholders are also given the right to request information that does not compromise the company’s interests or conflict with the CMA’s implementing rules and regulations.
For further information about the Capital Market Authority, For further information about the Capital Market Authority, the law and implementing rules and regulations that govern the securities market, please click on the following link CMA.
Issuers Disclosure Annual reports provide a description of the issuer, information regarding the board of directors, officers, and staff. It includes a statement by management on current and future developments expected to have a significant effect on the company's financial position.
The CMA’s Rules on the Offer of Securities and Continuing Obligations require all listed companies to disclose interim financial reports no later than 30 days after the end of the financial period, and their annual report no later than 3 months after end of the annual financial period.
Currently the Saudi Arabian Monetary Authority (SAMA, the central bank) requires banks and insurance companies in Saudi Arabia to report their financial statements under IFRS. Saudi Organization for Certified Public Accountants (SOCPA) standards apply to all other companies, listed and unlisted.
The Rules on the Offer of Securities and Continuing Obligations require each company’s board of directors’ report to contain, amongst other pertinent disclosures, information relating to any businesses or contract to which the issuer is a party and in which a director of the issuer, the CEO, the CFO or any person related to any of them is or was interested. For further information about the Capital Market Authority, the law and implementing rules and regulations that govern the securities market, please click on the following link CMA.

Corporate Actions & General Assemblies:

Dividend Payment Process

Dividends are announced through the official website of Saudi Exchange. On the Record Date, the entitlements are determined and the entitlement advices sent. When the companies make cash dividend payments, they are credited to the client's cash accounts under advice.

Dividend Payment Frequency

  • Paid quarterly, semi-annually or annually at the discretion of the issuer.

Interest Payment Frequency

  • Paid quarterly, semi-annually or annually at the discretion of the issuer.

Annual Financial Reporting

  • Within 3 months after the end of the annual financial period.

Interim Financial Reporting

  • Within 30 days after the end of the financial period.

Corporate Actions

Corporate Action Availability
Cash and Share Dividends Available
Stock Splits / Reverse Splits Unavailable – Fixed Par Value Regime (SAR10) – Companies Law
Buy – Backs Available– Subject to Guidance Note to the Regulatory Rules and Procedures issued pursuant to Companies Law relating to Listed Joint Stock Companies
Mergers / Acquisitions Available – Subject to the CMA’s M&A Regulations and Exchange Listing Rules
Capital Reductions Available – Subject to the CMA’s Regulations and Exchange Listing Rules
Rights Issues Available – Subject to the CMA’s Regulations and Exchange Listing Rules
Delisting Available – Subject to the CMA’s Regulations and Exchange Listing Rules

 General Assemblies

item description
Invitations/ Agendas Disseminated Publicly
Meeting Outcome Disseminated Publicly
Electronic Voting Available at Tadawulaty
Power of Attorney / Proxy Voting Allowed

Post-Trade Features:

Item Description
Clearing Members Clearing membership represents the set of elements required in its holder to provide clearing services for a number of products traded in the Saudi Stock Exchange. The member will be able to clear trades executed on its own and Clients account as well as the possibility to clear trades executed by other exchange members in the market (according to the Clearing Membership category).
Muqassa offers three membership category, which is intended to provide clearing members the flexibility to select the category that best fits their business:
1. Direct Clearing Members (DCM) who are authorized to clear Securities which they have traded in their capacity as an Exchange Member, including Securities traded on its own account and on behalf of its Clients.
2. General Clearing Members (GCM) who are authorized to clear Securities on behalf of one or more Clients, including Non-Clearing Members (other Exchange members), they may also clear Securities they have traded on their own account if they are trading members.
3. Non-Clearing Member (NCM): an exchange member only but which is not a Clearing Member and clears through a General Clearing Member.
Settlement Currency All transactions are settled in Saudi Riyals.
Registration Process All equities are automatically registered via book entry upon settlement through the SDC. Registration is in the beneficial owner's name with exception to the shares underlying Saudi Equity Swaps, which are registered in the name of the local Authorized Person party to the swap.
Delivery versus Payment (DvP) Settlement is conducted according to BIS DvP Model 2 – gross settlement of securities, net settlement of funds.
Buy-in Process Is a mechanism to be used to facilitate the following scenarios:
a.    Buying of securities to resolve securities shortages (buy-in).
b.    Selling of securities to resolve cash shortages (sell-out).
SBL Regulations Securities Borrowing and Lending (SBL) Regulations is to set out the framework for securities borrowing and lending activities in respect of listed securities in the Kingdom.
Ownership limitations As explained at Securities Depository Center Rules Article 56 foreign investor has individual and group ownership limitations. Investors which breach limitation is mandated to sell the securities on Exchange. 
Please check Frequently Asked Questions section for avoiding and mandatory sell of securities breaches.