▷ Edaa and Euroclear launch new post-trade link in Saudi Arabia

28.10.2021 – 15:20

Securities Depositary Center Company (Edaa) ,one of Saudi Tadawul Group subsidiaries; Euroclear group


– The agreement to link with Euroclear was signed during the Future Investment Initiative (FII) conference

– Saudi Arabia is to be connected to the Euroclear network in March 2022

– The Euroclear network of international investors has direct access to the Saudi sukuk and bond market

– International investors no longer need to apply for Qualified Foreign Investor (QFI) status

The Saudi Arabian Securities Depository Center Company (Edaa) and Euroclear Bank, the international central securities depository (ICSD) based in Brussels, signed an agreement at the Future Investment Initiative (FII) conference on the introduction of a fully Euroclear-enabled link to provide international investors with access to the local sukuk and bond market.

The connection, which is expected to be set up in March 2022, provides international investors with an additional channel to access the sukuk and bond markets of the Saudi stock exchange, the largest exchange in the Gulf Cooperation Council (GCC) and one of the three largest exchanges for emerging markets with a market capitalization of more than $ 2.5 trillion.

International investors can settle domestically issued bonds through a direct nominee account with Edaa using their existing Euroclear accounts. This follows on from improvements to the Saudi Tadawul Group’s market infrastructure, including improved delivery versus payment (DvP) frameworks in both the primary and secondary markets. The link, which will lead to greater interoperability within the market, comes at just the right time given the recent announcement that Saudi Arabia will be included in the FTSE Russell Emerging Markets Government Bond Index (EMGBI).

Euroclear’s accredited international investors will benefit from a range of services including in-house settlement, trading and custody of Saudi government and quasi-government bonds listed on the Saudi Stock Exchange without the need to apply for QFI status. Ultimately, eligible investors will also be able to use such sukuk and bonds as collateral for financing activities, including repos and pledging via Euroclear’s open collateral highway.

Raed Alhumaid, CEO of Edaa, explained: “We are pleased about the partnership with Euroclear, an international central securities depository, which enables us to expand the international reach of the Saudi capital market and thus to increase the diversity of the investor base in the market and to increase its efficiency. The link with international central securities depositories is one of Edaa’s milestones in continuous efforts to advance the Saudi capital market and its infrastructure in line with the Kingdom’s 2030 vision as we aim to increase our reach by creating more channels for international investors who can efficiently access the Sukuk and bond market want. “

Lieve Mostrey, CEO der Euroclear Group explained: “We are very pleased that we can make the size and robustness of our infrastructure available to the Saudi capital market. By making this G20 market Euroclear-enabled, direct access to a broader international investor base is created, which leads to improved liquidity and Cost efficiency leads. This success is the result of hard work by everyone involved. At the same time, we can use it to further expand our global service for our customers. “

In recent years, the Saudi capital market has seen increasing demand from international investors for Saudi listed sukuk and bonds. The issue volume rose to over 451 billion SAR and the global demand for government bonds increased steadily.

Information on Edaa

Securities Depository Center Company (“Edaa”) was founded in 2016 and is wholly owned by the Saudi Tadawul Group. “Edaa” operates and maintains the Depository and Settlement System (DSS) for the registration and administration of securities and for the registration of ownership of securities on the Saudi Exchange. It aims to improve the efficiency of securities custody and registration services in line with the goals of the Saudi Vision 2030 by developing a more imaginative environment that encourages excellence in all areas related to the capital market. For more information, see: www.edaa.com.sa

Information on Euroclear

The Euroclear Group is the trusted provider of post-trade services in the financial sector. Euroclear offers mutual funds the clearing and custody of domestic and cross-border securities for bonds, stocks and derivatives. Euroclear is a proven, resilient capital markets infrastructure that offers its clients around the world risk mitigation, automation and efficiency on a large scale.

The Euroclear Group includes Euroclear Bank, the international central securities depository, as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & International. The Euroclear Group processed the equivalent of EUR 897 trillion in securities transactions in 2020, equivalent to 276 million domestic and cross-border transactions, and held assets of EUR 32.8 trillion in custody for clients by the end of 2020. More information about Euroclear can be found at www.euroclear.com.

Photo – https://mma.prnewswire.com/media/1671536/Raed_AlHumaid_and_Lieve_Mostrey.jpg

Press contact:

Contact to the Saudi Tadawul Group: Asma Alghamdi
+966 (55) 225-4223
[email protected] Euroclear
Craig MacDonald
+44 207 849 0315
[email protected]

Original-Content von: Securities Depositary Center Company (Edaa) ,one of Saudi Tadawul Group subsidiaries; Euroclear group, übermittelt durch news aktuell


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