Riyadh – The Saudi Exchange (Tadawul) has launched a Market Making Framework for Exchange Traded Funds (ETFs), as part of an initiative to cement the local capital market position as a premier global financial hub.

The framework introduces a set of obligations by Tadawul, including maximum bid-ask spreads, minimum order sizes, and minimum presence time, according to a press release.

Meanwhile, the introduction of the framework aims to enhance secondary market liquidity, narrow bid-ask spreads, and enable efficient price formation for listed ETFs on Tadawul, further aligning the Saudi ETF market with global best practices and enhancing market efficiency.

Mohammed Al Rumaih, Tadawul CEO, said: “The launch of the ETF Market Making Framework represents a significant step in our ongoing journey to advance the efficiency and accessibility of the Saudi capital market and ensure the availability of liquidity in the ETF market while increasing investor confidence.”

Al Rumaih added: “This initiative reflects our commitment to ensuring market depth and transparency, and our focus remains on enhancing infrastructure, broadening market participation, and cementing the Saudi capital market position as a premier global financial hub.”

The ETF Market Making Framework introduces predefined obligations for market makers, grouped into three tiers.

Moreover, the selection of the ETF’s classification is determined based on a mutual agreement between the ETF Fund Manager and the Market Maker.

This framework aims to enhance liquidity, facilitating more frequent transactions, making the market more attractive to both domestic and international investors.

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