"We will try our best to have all the changes executed and activated before June, and as early as possible in Q2," the exchange's Chief Executive Khalid al-Hussan told Reuters on Wednesday. "Early next month we'll start testing and make sure that everyone is ready."
Trades in Saudi Arabia must be settled on the same day. By introducing T+2, settlement could occur up to two working days after execution, which is more convenient for foreign investors and common in emerging markets.
In June, MSCI will announce a list of countries under review for possible inclusion in its emerging market index; entry into the index would attract billions of dollars of foreign funds. Investors in the Saudi bourse were disappointed last year when the market was passed over for review.
Rival index compiler FTSE has said it will decide in September whether to upgrade Saudi Arabia to the status of a secondary emerging market. It has cited the T+2 settlement cycle as among factors that could justify an upgrade.
(Reporting by Katie Paul; Editing by Andrew Torchia and Susan Fenton) ((Katie.Paul@thomsonreuters.com;))
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