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Frequently Asked Questions

What is Tadawulaty?

Tadawulaty is a service offered by Tadawul and includes a bundle of services for investors:

Consolidated Reporting, Electronic Voting, Dividends Entitlement Reports, Expected Dividends Notifications, Shares Certificate Search, and Tender Offers.

You can access Tadawulaty through your member’s website, or at www.tadawulaty.com.sa.

Who is responsible of collecting trading commissions?

Trading commissions will be collected by the executing broker.

What are the transfer fees?

SAR 20 per issuance transferred.

How is the opening price determined for Equities?

The opening price is determined through an opening auction. During the opening auction investors may place orders (bid/ask). The trading engine will determine an equilibrium price at which all possible matching orders are executed at the end of the auction (uncross). The execution price is the opening price.

When is the opening auction?

The opening auction starts at 9:30am and ends at 10:00am. The market opening is randomized on a daily basis between 10:00:00am and 10:00:30am.

How is the closing price determined for Equities?

The closing price is determined through a closing auction, similar to how the opening price is determined in the opening auction. 
The closing auction is a session after continuous trading where investors may place orders (bid/ask). The trading engine will determine an equilibrium price at which all possible matching orders are executed at the end of the auction (uncross). The execution price is the closing price and becomes the next day’s reference price.   
The closing price is calculated based on normal trades only (SAR15,000 and above). If there are no trades during the auction, then the closing price is the last traded price (LTP) during continuous trading. If there are no trades during the day, the closing price is the previous day’s closing price.

When is the closing auction?

The closing auction starts after continuous trading at 3:00pm and ends at 3:10pm. The market closing is randomized on a daily basis between 3:10:00pm and 3:10:30pm.

When will the closing price be determined?

The closing price will be determined during the closing auction and will be disseminated to the market at the end of the closing auction, at 3:10pm. The market closes randomly every day within 30 seconds after 3:10 PM, between 3:10:00 and 3:10:30 at maximum. 

Which securities apply a closing auction mechanism to determine the closing price?

The closing auction is applied to the Main Market and Nomu – Parallel Market as well as tradable rights.

What type of orders are permitted during the closing auction?

Permitted: Limit orders, market orders, hidden orders and session orders. 

Do negotiated deals affect the closing price?

Negotiated deals do not affect the closing price.

Does the closing auction affect indices calculation?

The closing price determined by the closing auction is the last traded price of the day; therefore, indices calculations are updated accordingly. 

 

What is the closing price in case no trades occurred during the day?

If there are no trades during the day, the closing price is the previous day’s closing price.

What is the closing price in case no trades occurred during the closing auction?

If there are no trades during the auction, then the closing price is the last traded price (LTP) during continuous trading. 

 

What is the Global Industry Classification Standard (GICS)?

The Global Industry Classification Standard (GICS) was developed by Morgan Stanley Capital International (MSCI) and Standard and Poor’s (S&P) in 1999 in response to the global financial community’s need for a reliable, complete and standard industry classification system. The GICS methodology is widely accepted as the industry analysis framework for investment research, portfolio management and asset allocation. Its universal approach to industries worldwide has contributed to increased transparency and efficiency in the investment process. The GICS has become an industry model widely recognized by market participants worldwide. The GICS structure has four levels of detail: 11 sectors, 24 industry groups, more than 60 industries, and more than 150 sub-industries.

What does it mean that GICS is a "market-oriented" classification system? Why does that matter?

There are two approaches to industry classification: production-oriented and market-oriented. The emergence of the service era and the availability of global communications have changed the market focus from producers to consumers. In today’s economy, for example, drawing the line between goods and services is increasingly difficult and arbitrary, as almost all goods are sold with a service. Thus, the distinction between consumer goods and services has been replaced by the more market-oriented sectors of “Consumer Discretionary” and “Consumer Staples,” which both contain goods and services sub-industries.

Describe the hierarchical categories of the GICS.

The GICS structure currently has four levels of detail: 11 sectors, 24 industry groups, more than 60 industries, and more than 150 sub-industries. Since the classification is hierarchical, at each of the four levels a company can only belong to one grouping.

How companies are allocated to its relevant sectors?

Companies are allocated to Sub‐Industries according to the definition of its principal business activity that generate the majority of the company’s revenues. Sub‐Industries are grouped into Industries in such a way that general industrial and economic themes are common to all companies in the Industry. The Industries themselves are aggregated into Industry Groups, which in turn are aggregated into Sectors.

How will New Sector Indices be created?

Sector Indices are created based on GICS Level 2 (Industry Group). The base date on 8th of January 2017 and the base value is 5000 points, to allow for better performance comparability given one unified starting point. For more info availability, Sector Indices have a calculated history for 1 year backward. 

What will happen to Saudi Exchange’s old Sector indices?

Old sector indices were discontinued. However, historical values are still be available for any historical analysis.

Why is this global classification system important?

The GICS was developed and is maintained by two leading global index providers. It has been specifically designed to classify companies globally – in both developed and developing economies. The GICS is designed to meet the needs of the investment community for a classification system that reflects a company’s financial performance. GICS provides global coverage of over 44,000 + active, publicly traded companies.

How frequently are companies reviewed for potential GICS changes and how often does a company's GICS classification generally change?

Companies are reviewed annually upon publishing their annual reports to ensure that a company’s allocation is still relevant to its main line of business. Companies are also under constant surveillance for corporate actions. In general, a company’s classification will change owing to either changes in revenue sources or due to a major corporate action that redefines a company's primary line of business.

Who uses the GICS and how pervasive is the GICS in the international investment community?

There has been significant adoption of the GICS standard across all major groups involved in the investment process, including: Asset Managers, Brokers (institutional and retail), Consultants, Research, and Stock Exchanges. Globally the Investment community uses the GICS across the full spectrum of equity market management – including asset management, sector research, portfolio strategy, peer analysis, and client account reporting. The use of the GICS enables market participants to identify and analyze companies using a common global standard.

Which particular advantages do strategists, analysts and investors draw upon in applying the GICS across their analysis and global benchmark selection?

The use of this global standard helps strategists, analysts and investors compare companies outside of their local markets. The GICS establishes a common standard that enables asset owners, asset managers and investment research specialists to make local and global comparisons by sectors. The standardized classification system permits foreign investors to look into local markets and local investors to look out at the rest of the world when comparing stocks within the same sector. The GICS defines peer groups tightly and avoids grouping unlike companies together.

How adaptable is the GICS structure over time to Economic Changes?

The four-level GICS structure reflects equities in today’s global investment environment, yet is flexible enough to capture tomorrow’s developments. As the global economy changes, sectors, industry group, industries and sub-industries can be added or divided.

What does the letter (T) stand for? and what does the added number refer to?

The letter (T) stands for the term (Trade); i.e. transaction.

As for the added number, it refers to the duration (day) required for completing the settlement of a transaction.
 

Which types of securities will the T+2 settlement cycle apply to?

The new settlement cycle will apply to transactions of securities listed in the market of all types (stocks, sukuk, bonds, Exchange-Traded Funds (ETFs), tradable rights), in addition to over-the-counter transactions (OTC) and Negotiated Deals where T+2 is the default settlement cycle.

What is meant by the duration of securities settlement cycle?

The new settlement cycle will apply to transactions of securities listed in the market of all types (stocks, sukuk, bonds, Exchange-Traded Funds (ETFs), tradable rights).

What is the duration for the settlement cycle of securities’ transactions?

In the T+2 settlement cycle, all types of securities’ transactions are completed after two business days following the transaction execution date; i.e. (T + 2).

What is 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 orders must be flagged as short sell when transmitting the order.

What is the purpose of short selling?

Short Selling can be used as a hedging strategy and risk management tool for investors.

What is the settlement of securities?

It is the process of transferring securities of executed transactions from the seller’s investment portfolio to the buyer’s investment portfolio.

What is borrowing securities?

Borrowing securities is the temporary transfer of securities from its owner (lender) to an investor (borrower) with an obligation to return them back to their owner at a future agreed upon date. A borrower shall provide and maintain financial collateral as agreed with the lender and shall at all times be not less than 100% of the current market value of the borrowed securities. The value of the collateral provided may be amended at the discretion of The Capital Market Authority.

What is the settlement of cash?

It is the process of transferring the value of securities for executed transactions from the buyer’s investment account to the seller’s investment account.

When is a settlement of securities completed?

A settlement is complete when securities and cash settlements are complete.

How is a transaction executed?

A transaction is executed by matching the sell order with the buy order.

What is the role of the custodian?

The custodian is the investor’s settlement and asset servicing agent in the market. It is used by the investor to support and manage pre and post trading activities in the market. The custodian will be assigned by the investor in the market for the following services:

  • Settlement: guaranteeing the settlement of all investor’s trades in the market. Responsible for receiving/delivering cash/securities.
  • Safekeeping: safeguarding investor’s assets.
  • Corporate actions: administers corporate actions on securities held such as securities dividends, tender offer, rights issue, etc.
  • Cash Management: maintains cash bank accounts, deposits, withdrawals and other cash transactions.
  • Reporting: provides the investor with information and analysis of the positions and performance of his/her portfolios.

Should the custodian transfer securities/cash to the executing member of the Exchange to place an order in the market?

No, the executing member only has “remote” access (without the ability to view the investor’s assets) to enter buy-sell orders on behalf of the investor. All executed trades will be reflected in the investors account held by the custodian. The executing member acts as an execution agent only and retains no investor balance on its own account as a result of any trade.

Is the Independent Custody service mandatory for investors?

It is not mandatory, the service is optional and investors may choose to use the current custody model (combined brokerage and custody) instead.

Can orders be cancelled or amended during the closing auction?

Yes, orders can be cancelled or amended during the closing auction.

What will happen if the order is not matched during continuous trading?

The order will move to the closing auction.

What will happen if the order is not matched during closing auction?

The order will behave according to the order validity

 

Can orders be placed after the closing auction (after 3:10pm)?

Yes. They may be placed at the closing price only in the trade-at-last session.

 

Where are the closing prices displayed on Saudi Exchange’s website?

Companies Detail Quote
Historical Data (Performance Summary)
Detail Quote Non Adjusted
Last 6 traded days 
The closing prices are displayed in the following reports:
Daily Report
Weekly Report
Monthly Report
Quarterly Report
Annual Report
Daily Financial Indicators

Will the company's shares be suspended if the extraordinary general assembly issued its resolution to reduce the capital due to capital exceeding the company's need?

No. The Exchange suspend the trading of the company’s shares for two trading sessions following the end of the creditors’ objection period and effectiveness of the reduction resolution, which is announced when the extraordinary general assembly’s resolution is issued to reduce the capital.

Will the company's shares be suspended if the extraordinary general assembly issued its resolution to reduce the share capital due to amortization of losses?

Yes. The Exchange suspend the trading of the company's shares for two trading sessions following the issuance of the extraordinary general assembly resolution to reduce its capital.

What are the reasons that drive listed companies to buy-back their shares in the market?

A company buys back its shares to either achieve capital reduction or retain ownership as Treasury Shares.

By which purposes are listed companies allowed to buy-back their shares and use them as Treasury Shares?

According to Article 13 of the Regulatory Rules and Procedures issued pursuant to the Companies Law relating to Listed Joint Stock Companies, issued by the Board of the Capital Market Authority; a company may not buy-back its shares to use them as Treasury Shares except for the following purposes:
- If the Board or its authorized representative considers that, the share market price is lower than its fair value.
- To fulfill debt instruments holders’ right to convert them into shares in accordance with the terms and conditions of those instruments.
- Share swap transactions for the acquisition of shares or company ownership or an asset purchase.
- To allocate them to the company’s employees as part of an Employee Stock Ownership Plan.
- Any other purpose approved by the Capital Market Authority (CMA).

How can a listed company buy-back its shares?

In Article 12 of the Regulatory Rules and Procedures issued pursuant to the Companies Law relating to Listed Joint Stock Companies, the Capital Market Authority has listed several rules to govern share buy-back practices for listed companies.

What are Treasury Shares?

Purchased shares retained by a listed company for various objectives, including shares allocated to employees as part of its Employee Stock Ownership Plan.

Are listed companies allowed to sell Treasury Shares?

A listed company may sell its Treasury Shares if this is provided and permitted in its bylaws and in accordance with the rules that are stipulated in Article 22 of the Regulatory Rules and Procedures issued pursuant to the Companies Law relating to Listed Joint Stock Companies, issued by the Board of the Capital Market Authority.

Are there any restriction periods by which listed companies are not allowed to buy-back or sell their shares in the market?

Yes, there are restriction periods which precede the publishing of quarterly and annual financial statements as follows:
During the (15) calendar days preceding the end of the financial quarter and until the date of the company’s announcement of its reviewed interim financial statements.
During the (30) calendar days preceding the end of the financial year and until the date of the company’s announcement of its reviewed interim financial statements or its audited annual financial statements.

How can additional information on a company’s share buy-back and sell be obtained?

Additional information can be obtained through the following disclosures:


- Corporate Announcements on the official website of the Saudi Exchange, where the company must announce the approval of the buy-back transaction and its conditions immediately after the relevant resolution of the Extraordinary General Assembly. The company is also obligated to announce results of any share buy-back transaction to the public upon completion of each transaction phase.
- Board’s Annual Report, which should contain details relating to Treasury Shares retained by the company and details on of the use of these shares.
- Market Reports on the official website of the Saudi Exchange, where the Exchange publishes a comprehensive report (Listed Companies Share Buy-back Disclosure Report) updated by Saudi Exchange to disclose all listed companies’ share buy-back ownership as of end of the quarter besides ownership as of end of the previous quarter for comparison on a quarterly basis.

How often and when is the Listed Companies Share Buy-back Disclosure Report updated?

The report published on Saudi Exchange’s website is based on data provided and verified by listed companies. Neither Saudi Exchange nor any of its subsidiaries bear any liability for the validity and integrity of the provided data. The report is updated on a quarterly basis to reflect the ownership of listed companies at the end of the last day of each quarter besides the ownership at the end of last day of the previous quarter for comparison.

How can the Listed Companies Share Buy-back and Sell Disclosure Report be viewed on Saudi Exchange website?

The Listed Companies Share Buy-back Disclosure Report can be viewed on Saudi Exchange’s website under:

Markets ® Reports and Publications ® Market Reports
Or by clicking on the link below:

https://www.tadawul.com.sa/wps/portal/tadawul/markets/reports-%26-publications/market-reports

What are Over the Counter (OTC) trades?

OTC trades are conducted when both parties agree off market on the trade volume and price and executed on the Exchange trading system for suspended listed companies and unlisted Sukuk and Bonds.

what are the common cases for converting a listed security to OTC trading?

  • The company’s board of directors resolution to permit a listed company’s shares to be 
    traded Over the Counter.

  • The shareholders assembly’s resolution to permit a listed company’s shares to be traded 
    Over the Counter.

  •  The Authority’s resolution to permit a listed company’s shares to be traded Over the 
    Counter.
     

Which listed securities are eligible for OTC trades?

Only suspended listed securities that the exchange specifies.

When are OTC trades available for listed securities?

After six days of announcing the suspension of a listed security.

What is the process for conducting an OTC trade?

  • A buyer and a seller agree match on the Exchange with same trade price, volume, and trade date
  • Trade is settled through Edaa (T+2) unless otherwise specified by the Exchange Member.

Main differences between on-exchange trades and OTC trades?

  ON EXCHANGE TRADE OTC TRADE
Order Book Yes No
Fluctuation Limits Yes No
Price Reporting Yes No
Trade Matching On Saudi Exchange Trading Platform On Saudi Exchange Trading Platform
Settlement Cycle T+2 T+5 to T+0
Impact on Index(TASI/ Nomu/ MT30) Yes No
Historical Data Dissemination Yes No
Order Entry Through Saudi Exchange and Edaa members Through Saudi Exchange and Edaa members

How are Foreign Companies share listed and traded?

Foreign companies shares are listed on both Saudi Exchange and the foreign exchange mentioned in the company’s profile.

Do the shares traded on Saudi Exchange have a separate ISIN code?

The ISIN code for the shares is the same across all markets the company is listed on, foreign companies’ shares are fully fungible across markets.

Are foreign companies’ shares listed on Saudi Exchange part of the Main Market and Nomu – Parallel Market?

The shares of the foreign company may either be listed as part of the Main Market or Nomu – Parallel Market.

In what currency are the foreign companies' shares traded on Saudi Exchange?

Foreign companies’ shares on Saudi Exchange are traded in SAR, the currency of the Saudi market.

In what currency are the dividends paid?

Shares held through the Saudi Securities Depository Centre Company (Edaa) will receive dividend payments in SAR on their Saudi accounts, converted at the exchange rate as disclosed by the Company and adjusted for taxes, if any.
 

If I trade shares of a foreign company listed on Saudi Exchange, where will the shares settle?

Trades executed on Saudi Exchange will be cleared at Muqassa and settle through Edaa.

Does the 49% foreign Ownership Limitation apply on the Foreign company?

Since the Foreign company is not a Saudi incorporated company, ownership limitations as applicable in the foreign jurisdiction will apply.
 

Does the 10% QFI ownership threshold apply on the foreign company?

Since the foreign company is not a Saudi incorporated company, ownership limitations as applicable in in the foreign jurisdiction will apply.    
 

Does an investor need to have an account in Edaa in order to trade shares on the Saudi Exchange?

An investor should have an account in Edaa to trade in the Saudi Exchange.

How much does it cost to trade shares on Saudi Exchange?

The maximum trading commission on Saudi Exchange is 15.5 basis points which includes brokerage, Saudi Exchange, Edaa and CMA fees.

Where can I find more information about the foreign company?

Investors can find more information on the foreign company’s website through their investor relation section where all publicly available information on the Company is available, or on the company’s profile section on Saudi Exchange website.

Are foreign companies listed on Saudi Exchange subject to the same requirements as Saudi listed companies?

Yes, foreign companies listed on Saudi Exchange are subject to the same listing, disclosure and governance requirements as Saudi listed companies.

Is the settlement cycle and depository services for foreign securities listed on Saudi Exchange are the same as offered for listed domestic securities?

Yes, the post-trade process for foreign securities listed on Saudi Exchange will be the same as listed domestic securities.

What is the settlement currency for the foreign security traded on Saudi Exchange?

The settlement currency will be in Saudi Riyals (SAR).

How can investors transfer foreign securities from the foreign depository to Edaa?

  • To transfer securities from the foreign depository to Edaa, the investor should submit a request to the foreign depository, as per the requirements of the foreign depository. 
  • The foreign depository will validate the details provided by the investor and initiate the transfer to the custody account of the investor at Edaa.

How can investors transfer securities from Edaa to a foreign depository center?

  • To transfer securities from Edaa to a foreign depository center, the investor should submit a “Security Transfer Request” form to Edaa through a custody member. 
  • Edaa will validate the details provided by a custody member and initiate the transfer to the custody account of the investor at the foreign depository center.

Will the transfer be effective on the day of submitting the “Security Transfer Request”?

  • If the request for a transfer is submitted to Edaa at or before 11:00 am (GMT+3), the transfer will be executed on the same day. If the request is not executed, it will be planned for execution on the next business day.
  • For transfer forms submitted after 11:00 am (GMT+3), the transfer will be executed on the next business day in accordance with the work-days stipulated in the Saudi Labor Law. 

How are corporate actions key dates determined for foreign securities at Edaa?

Corporate action key dates for foreign securities will be timed in accordance to the market where they are primarily listed. 

How securities proceed from corporate actions provided?

Edaa will deposit the security proceeds from the corporate action event to the investor. Cash compensation for security fractions will comply with the primary market practice of the foreign security.

How are cash proceeds from corporate actions transferred?

The paying agent appointed by the issuer will provide the cash proceeds of the corporate action event to the investors of Edaa in accordance with the given corporate action.

What is the trade-at-last session?

The trade-at-last session is a continuous trading session where market participants may place orders only at the closing price formed as a result of the closing auction.

When is the trade-at-last session?

The trade-at-last session starts after the closing auction session from 3:10pm + random 30 seconds until 3:20pm

Which securities apply a trade-at-last session?

The trade-at-last session is applicable to the Main Market and Nomu – Parallel Market as well as tradable rights.

What types of orders are permitted during the trade-at-last session?

Permitted: Limit orders, Hidden orders, Negotiated Deals, Fill-or-Kill (FoK), and Fill-and-Kill (FaK) 

Not permitted: Market orders, Session orders

 

Can orders be cancelled or amended during the trade-at-last session?

Yes, orders can be cancelled or amended to the closing price only during the trade-at-last session.

Can orders be placed after the trade-at-last session (after 3:20pm)?

No. Orders can only be cancelled or amended after the trade-at-last session.

What is the difference between the Daily Limit and Static Limit for the Main Market and Nomu – Parallel Market?

Daily Price Fluctuation Limit: is set on the price of a security limiting it from breaching a specific limit set by the Exchange. The daily fluctuation limits will be based on the previous day closing price (reference price) or the listing price in the case the first day of trading a newly listed security.

Static Price Fluctuation Limit: is applied once the price of a security reaches ±10%. Once ±10% is reached, a volatility auction is triggered and the triggering price becomes the new static price for the Volatility Auction with a new ±10% static limit. Once the Volatility auction completes, a new ±10% static limit is set based on the price resulting from the volatility auction.

Limit Main Market Nomu – Parallel Market
Fluctuation Limits

Daily Price Fluctuation Limit is ±30% with Static Price Fluctuation Limit of ±10%.  This 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 newly listed security, the Daily Price Fluctuation Limit will revert back to ±10% and the Static Price Fluctuation Limit will no longer be used. This applies for Equities, Real Estate Investment Traded Funds and Closed-ended Investment Traded Funds.

Daily Price Fluctuation Limit is ±30% with a Static Price Fluctuation Limits of ±10%. This applies on an ongoing basis for all listed securities on Nomu.

What is the “Reference Price” in regards to the Daily Limits?

For the first day of listing: the reference price is the listing price

For second day onwards: the reference price is the previous days’ closing price, taking into consideration any adjustment in prices due to corporate actions

 

What is a Volatility Auction?

A Volatility Auction is an auction triggered any time during the continuous trading session when an order can potentially be matched at the upper or lower end of the Static Limit (+/-10%). A Volatility Auction lasts for 5 minutes and mimics the behavior of the Opening and Closing Auctions.

Is it possible to enter buy/sell orders during a Volatility Auction?

Yes, Market Participants may enter buy/sell orders during a Volatility Auction and the Exchange will disseminate a Theoretical Price and Theoretical Volume. A Volatility Auction lasts for 5 minutes and mimics the behavior of the Opening and Closing Auctions. At the end of the 5-minute Volatility Auction, the security will open with an updated price (Static price), which is the last Theoretical Price.

What is the Last Theoretical Price?

It is the price that results at the end of a Volatility Auction and is considered the new “Static Price”. Thus, Static Limits will be adjusted accordingly.

What happens at the end of Volatility Auctions if no Theoretical Price is reached?

In the absence of a Theoretical Price, the Static Price reverts back to the previous Static Price.

Can Volatility Auctions be triggered more than once?

Yes. Volatility Auctions are triggered when an order reaches the Static Limit, and this can potentially happen more than once during continuous trading.

What happens to the Volatility Auction triggering order?

The triggering order is a potentially executable order at the upper or lower Static limit. The order is not executed and will adjust the Static limit, meaning the Static Limit applied during the Volatility Auction is +/- 10% based on the triggering order’s price.

What type of orders and validity conditions are permitted during Volatility Auctions?

Permitted orders: Limit Orders, Market Orders

Permitted validity conditions: Hidden Orders and Session Orders.

Orders that are not permitted: Negotiated Deals.

Validity conditions not permitted: Fill-Or-Kill Orders, Fill-And-Kill Orders

What happens to unmatched Market Orders in Volatility Auctions?

At the end of all auctions, unmatched parts of any Market Order will be converted into Limit Orders at the last Theoretical Price. If the Theoretical Price is not formed, the trading system will cancel any outstanding Market Order, either unmatched or partially matched.

Can orders be cancelled or amended during a Volatility Auction?

Yes, orders can be cancelled or amended.

What triggers the Volatility Auction, and how is it applied on the Main Market and Nomu -Parallel Market?

Volatility Auctions are only triggered when the Static Limit is reached.

For Main Market securities; the Volatility Auction can potentially apply only in the first three days of listing new equities, REITs and CEFs if the static limit is reached. Since Volatility Auctions and Static Price Fluctuation Limits are correlated, Volatility Auctions will stop existing on the 4th day of trading newly listed equities, REITs and CEFs.

However, for Parallel Market-Nomu securities Volatility Auctions will be applied on a continuous basis for all securities.

What happens if the Closing Auction starts while orders are in Volatility Auction?

All orders will join the Closing Auction session, and uncross will take place at the end of the Closing Auction.

Example: If a Volatility Auction is triggered on a security at 2:57PM and given the Closing Auction starts at 3:00PM, the orders entered into the Volatility Auction starting 2:57 will merge with the Closing Auction starting at 3:00PM, and ending at 3:10PM + 30 second random uncross.

Which auctions may extend, and why?

Extensions only apply for Opening & Closing Auctions. The Exchange will automatically extend the Opening/Closing Auction on a security for a period of 2 minutes if at the end of the Opening/Closing Auction there are unmatched market orders, or if the Theoretical Price is at the upper or lower end of the Static Limit (+/- 10%). In this event, the security opens/closes randomly within 30 seconds between 3:12:00PM and 3:12:30PM. The Trade-at-Last session will always start after the Closing Auction uncross and end at 3:20pm.

Example: If there are unmatched market orders or the Theoretical Price is at the upper of lower end of the Static Limit (+/- 10%) at the end of the Closing Auction at 3:10PM, the Closing Auction will extend to 3:12PM and close randomly between 3:12:00PM and 3:12:30PM. The Trade-at-Last session will start immediately after the closing and will end at 3:20:00PM. The Trade-at-Last session does not extend. 

Does the Extension of the Opening and Closing Auctions include Volatility Auctions as well?

No, the two-minute extension on the Opening and Closing Auctions do not apply to Volatility Auctions. A Volatility Auction is a separate auction held during continuous trading.

Will the Trade-At-Last session be affected by the extension of the Closing Auction?

No. Regardless of an extension of the Closing Auction, the Trade-at-Last session will always start after the Closing Auction uncross and end at 3:20pm.

What is the fluctuation limit applied on Negotiated Deals?

The Daily Limit applies to Negotiated Deals. 
Daily Price Limit is not applicable for Sukuk and Bonds.


 Example: For Main Market securities except Sukuk and Bonds, Negotiated Deals placed during the first three days of listing new equities, REITs and CEFs are subject to the Daily Limit of ±30%. Negotiated Deals placed on the 4th day onwards are subject to the Daily Limit of ±10%.


As for Nomu – Parallel Market, Negotiated Deals are subject to the Daily Limit of ±30%, which is applied on a continuous basis for all securities.

What is a Negotiated Deal?

A trade negotiated between a buyer and a seller outside of the order book. These trades are pre-agreed price and quantity. These trades must meet the requirements determined by Saudi Exchange. More details on the requirements can be found in the Trading and Membership Procedures which is available on Saudi Exchange’s website.

What is the trading commission on a Negotiated Deal?

The trading commission on Negotiated Deals is similar to the commission applied to regular market trades.

What are the requirements in order to conduct a Negotiated Deal?

There are two requirements that a Negotiated Deal must meet in order to be allowed for execution. The two requirements are; Size requirement and Price requirement. 
For Sukuk and Bonds, Negotiated Deals does not apply price requirement but only size requirement is applicable.

What is the Size Requirement for Negotiated Deals?

The size requirement to conduct a Negotiated Deal on the Main Market on a given security is to meet the minimum size requirement for the tier that the security falls in which is determined by Saudi Exchange and published on Saudi Exchange’s website. Where all securities in Nomu - Parallel and Sukuk /Bonds falls under one size requirement.

What is the Price Requirement for Negotiated Deals?

The price of a Negotiated Deal must fall within the Daily Price Fluctuation Limits for Main Market and Nomu, where there is no price requirement for Sukuk and Bonds.

How can the minimum size requirement for Negotiated Deals be known?

For securities listed in the Main Market There are four tiers with predefined minimum size thresholds, and securities will be classified into one of these tiers. Saudi Exchange publishes the minimum size for each of the four tiers and the list of securities in each tier on Saudi Exchange. Where securities listed in Nomu - Parallel and Sukuk/Bonds has one minimum size requirement .

How is the Size Requirement for Negotiated Deals determined?

The process of classifying the Main Market securities is based on the security’s Average Daily Traded Value during the previous six months. The four tiers occurs twice a year; first day of January and first day of July. 
ADTV (Average Daily Traded Value) calculation is not included for Nomu - Parallel Negotiated Deals.

What is the size requirement for Negotiated Deals on Tradable Rights?

Negotiated Deals size requirement on Tradable Rights is SAR 1 Million in the Main Market and SAR 300,000 in Nomu – Parallel Market.

What is the size requirement for Equities resuming trading in the Main Market and Nomu – Parallel after a suspension period?

Equities are classified into tiers, disclosed on Saudi Exchange website on the first day of January and the first day of July, and reflective of the last 6 months Average Daily Traded Value.. Equities which have been suspended for the duration of the 6 month period with a SAR 0 Average Daily Traded Value due to suspension, will be classified as per the lowest tier of SAR 300,000.

For Nomu – Parallel Market, the size requirement is SAR 300,000 for all listed Securities, regardless of suspension.

What is the minimum size requirement for Negotiated Deals conducted on newly listed companies on the Main Market?

SAR 1 million during their first six-month period. Then, they will be classified into one of the predefined tiers based on their previous six-month Average Daily Traded Value in the next update after completing a full six-month period after listing.

What is the minimum size requirement for Negotiated Deals conducted on transitioning companies from Nomu – Parallel Market to the Main Market?

SAR 1 million during their first six-month period. Then, they will be classified into one of the predefined tiers based on their previous six-month Average Daily Traded Value in the next update after completing a full six-month period after transition.

In which sessions are Negotiated Deals allowed to be executed?

Negotiated Deals may be executed in the continuous trading session and at Closing Price in the trade-at-last session. Such transactions are not permitted during all auctions.

Are Negotiated Deals allowed to be executed during auctions?

No, Negotiated Deals are not allowed to be executed during any auction.

Are Negotiated Deals allowed during Trade-at-Last session?

Yes, Negotiated Deals are allowed to execute during Trade-at-Last only if placed at the Closing Price in addition to meeting the Size Requirement.

What is the settlement cycle for Negotiated Deals?

The settlement cycle of the Negotiated Deals transaction is T+2 unless the Buyer and Seller agreed on a different settlement cycle from T+0 to T+5.

On which securities can Negotiated Deals be executed?

Negotiated Deals are allowed to be executed on all listed securities. However, there are different requirements for different listed securities.

What is the minimum size for Negotiated Deals conducted on securities listed in Nomu-Parallel Market?

SAR 300,000 is the minimum size requirement for Negotiated Deals conducted on securities listed in Nomu – Parallel Market.

What is meant by the bilingual disclosure by Issuers, and when will it be enforced?

It is meant that to disclose in both Arabic and English languages ​​for all disclosures published on the Saudi Exchange website. It was imposed since January 1, 2021.

Is bilingual disclosure in both Arabic and English is mandatory for all issuers whose securities are listed on the main market?

Yes, it is mandatory for all listed securities in the main market for all disclosures and reports published on the Saudi Exchange website through the designated system that the market determines for this purpose in accordance with the listing rules.

Is the bilingual disclosure in both Arabic and English mandatory for all issuers whose securities are listed on the parallel market "Nomu"?

For all listed securities in the Parallel Market (Nomu), disclosure will be mandatory in Arabic language, and the Issuer can translate any of that to English for all disclosures and reports through the designated system that the market determines for this purpose in accordance with the listing rules.

What is the purpose of mandating bilingual disclosure in both Arabic and English languages?

This change aims to improve the means of disclosure and provide the necessary tools to enable investors to reach to all the information that helps them in making their decisions and to raise the level of transparency and disclosure in the market in line with the Kingdom's Vision 2030 and the financial sector development program, one of it’s approved pillars is the development of an advanced financial market and to provide equal opportunities for all types of investors to reach the disclosures published on the Saudi Exchange website.

What are the main requirements that the Issuers must comply to with regard to disclosure in Arabic and English?

The disclosure should be clear, correct and not misleading, and that it fulfills all the disclosure requirements stipulated in Chapter Five of the Listing Rules for Continuing Obligations, Regulations, Implementing Regulations and Market Rules, as all the rules and regulations are published in both languages.

What are the obligations of the liaison officer authorized by the issuer to disclose information?

To be a holder of professional certificate of disclosure.

To be aware of all relevant rules, regulations and market rules and to fully comply to it.

The disclosures and reports are submitted through the submitter and then approved by the supervisor to ensure the quality of the information provided to the public.

Does the designated system specified in the listing rules for disclosure enable Issuers to submit bilingual disclosure in both Arabic and English?

Yes. The designated system for disclosure enables all Issuers to publish all disclosures in both Arabic and English in an easy and accessible method, and helps Issuers to disclose in both languages.

How can the investor view and read the disclosures or reports published in the English language?

All announcements published in English will be available on the Saudi Exchange website in the English version and on the company profile page as well.

What is Buy-in Process?

The 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).

What is mandatory Buy-in?

Mandatory buy-in orders will be submitted by the Clearing House on behalf of the Exchange Member

What is optional Buy-in?

optional buy-in orders will be submitted by the Exchange member.

what is the settlement cycle for Buy-in?

The settlement cycle of the Mandatory buy-in and Optional Buy-in trades is T+0.

What is the fluctuation limit applied on Buy-in?

The daily fluctuation limit for the Buy-in Process shall be ±30% for all Securities, except for Debt Instruments.

What is the reference price for Buy-in?

Reference price will be linked to order book, except during the Ex-Date and the Record date of the Corporate Actions.

When Buy-in sessions start and end?

Auction Sessions (as per the official time in the Kingdom) Available Buy-in Process and order types

 

 

 

 

 

First Auction

8:00 AM to 9:00 AM

Buy-in Process:

Mandatory buy-in and optional buy-in /and optional sell
out orders.

Order Type

  • All Mandatory Buy-in orders in this session must be market orders
  • Optional buy-in orders/ and optional sell out orders may be either market order or limit order
9:00 AM – 9:30 AM

Exchange Members may submit orders to match the bid and offer Submitted in the previous session, where the trades will be executed at the end of the auction at 9:30am.

Order Type:

All orders in this session must be limit orders.

 

 

 

 

Second Auction

1:30 PM – 2:30 PM

Buy-in Process:

Mandatory buy-in and optional buy-in /and optional sell out orders

Order Type: 

  • All mandatory buy-in orders in this session must be market orders.
  • Optional buy-in orders /and optional sell out orders may be either market orders or limit orders.
2:30 PM – 3:00 PM

Exchange Members may place orders to match the bid and offer Submitted in the previous session, where the trades will be executed at the end of the auction at 3:00pm.

Order Type:

All orders in this session must be limit orders

What is a dual listing?

A dual listing is when a particular security is listed on two stock exchanges. Investors in both markets, as well as qualified international investors, can therefore participate in a dual listed IPO. 
Once listed, it will be possible for investors on both exchanges to trade the Company’s shares. The Offering price of the offered shares will be the same across both exchanges, after accounting for the prevailing exchange rate.
 

What are the benefits to investors for a dual listing?

Investors can take advantage of greater liquidity in the shares and extended trading times, as well as exposure to securities outside of their home market.

How does a dual listed company disclose information in both markets?

A dual listed company will disclose material information in both markets through the formal communication channels of both exchanges, and in full compliance with the regulations applicable to listed companies in both countries. 

Will the company be part of the same industry group across both markets?

Sector classifications on exchanges are undertaken by independent third parties. As such, based on evaluation of the dual listed company by these third parties, the sector classification will be assigned, and may be different in both markets. 

Will the share price of a dual listed company be different between both exchanges?

The share price on both exchanges will be the same at the time of listing, after accounting for the prevailing exchange rate. However, post listing, if the exchanges have different trading days and hours, trading characteristics (including trading volume and liquidity), trading rules, listing rules and investor bases, the trading price of the shares on both exchanges may not be the same at any given point in time.

Does the 49% foreign ownership limitation apply to dual listings in Saudi Arabia or Abu Dhabi?

No, the 49% foreign ownership limitation does not apply to dual listed companies in Saudi Arabia.

Does the 10% QFI ownership threshold for Saudi Arabia apply to dual listings?

No, the 10% QFI ownership threshold does not apply to dual listed companies in Saudi Arabia.

If shares of a dual listed company are suspended in one market, will the stock also be suspended on the Saudi Exchange?

Suspension of shares from trading is dependent on existing regulations in each market.

How can shares be transferred from one market to another?

Shares are fully fungible and can be easily transferred between exchanges if investors are qualified to invest in both markets. Investors who wish to transfer their shares between the exchanges must hold a National Investor Number (“NIN”) and depository accounts with both exchanges. The movement of shares is restricted to the beneficial owners.

Will trading hours be impacted?

Each market will operate in line with its regular trading times and public holidays. 

Can foreign investors participate in the IPO?

Yes, providing they meet the qualification requirements set out in the company’s Prospectus.

Can a foreign investor subscribe in both markets?

Yes, providing they meet the qualification requirements set out in the company’s Prospectus.