Saudi CMA approves Securities Central Counterparties Regulations

RIYADH — The Saudi Board of the Capital Market Authority (CMA) issued Wednesday its decision to approve the Securities Central Counterparties Regulations.

The approved regulations aim at regulating the securities clearing activities in the Kingdom, and specifying the procedures and conditions for obtaining an authorization to carry out such activities; which will contribute to introducing new securities classes such as derivatives, in addition to guaranteeing the settlement and fulfillment of obligations of transactions party, which will in turn strengthen the capital market current infrastructure and enhance its efficiency.

Furthermore, the approval of the Securities Central Counterparties Regulations was based on the amendments adopted lately to the Capital Market Law. The amendments granted the CMA the power to license the capital market infrastructure institutions that include the exchanges, depository centers, clearing centers, and activate its role to perform its duties and obligations within the capital market infrastructure institutions.

In preparation of the Securities Central Counterparties Regulations, the CMA took into account the best international practices in the international financial markets, the Principles for Financial Market Infrastructures (PFMI) issued by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO), and the comments it received after it had published the draft Regulations on its website for public consultation for a period of (14) calendar days.

This comes in continuance to the efforts of the CMA to develop and regulate the Capital market in the Kingdom, and in its aims to raise the attractiveness of the Capital market to all categories of investors, which will enhance its regional and international competitiveness, by raising the consistency between its regulatory requirements and the international best practices and standards, and in line with the objectives of the Financial Sector Development Program, one of the main programs of the Saudi Vision 2030, and in accordance with the CMA's Strategic Plan (Financial Leadership Program).