Saudi Stock Exchange Launches First Derivatives Market, Clearing House

Published August 31st, 2020 - 12:30 GMT
Saudi Stock Exchange Launches First Derivatives Market, Clearing House
The launch of the derivatives market is considered to be a vital move that will provide investors more exposure to the Saudi capital market. (Shutterstock)
The Saudi Stock Exchange (Tadawul) on Sunday officially launched its first Derivatives Market and a clearing house, The Securities Clearing Center Company (Muqassa), both running on Nasdaq’s market technology.

In a statement, the exchange also unveiled the first exchange-traded derivatives product, which is called the MT30 Index Futures. The new product is an index futures contract based on the MSCI Tadawul 30 Index (MT30).

“This is a significant step in introducing sophisticated market products and creating a trading environment that is attractive to local as well as international investors,” said Khalid Al-Hussan, Tadawul CEO.

The launch of the derivatives market is considered to be a vital move that will provide investors more exposure to the Saudi capital market. It is part of the key initiatives under the Saudi Vision 2030.

As the market infrastructure develops, Tadawul plans to roll out more derivatives products such as Single Stock Futures, Single Stock Options and Index Options.

Lars Ottersgård, executive vice president and head of the Market Technology, Nasdaq, said: “Tadawul has been resolute in its ambitions to transform its market infrastructure in order to have world-class technology that meets and exceeds today’s demands and the new challenges of tomorrow.”

He added: “We are pleased to celebrate the launch of Tadawul’s new derivatives market and CCP, as well as further extending our technology relationship. Nasdaq is fully committed to supporting Tadawul through this important transformation.”

The launch of the derivatives market in Saudi Arabia is one of the Financial Sector Development Program’s (FSDP) key initiatives under the Saudi Vision 2030. It marks a significant step in introducing sophisticated market products and creating a trading environment attractive to local as well as international hedgers and traders.

Nasdaq's market technology powers more than 250 of the world's market infrastructure organizations and market participants, including broker-dealers, exchanges, clearinghouses, central securities depositories and regulators, in over 50 countries with end-to-end, mission-critical technology solutions.

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