Riyadh – Mubasher: The Saudi Capital Market Authority (CMA) has approved the Securities Central Counterparties Regulations and amended the Glossary of Defined Terms Used in the Regulations and Rules of the CMA.

The Regulations aim to regulate securities clearing activities in Saudi Arabia and specify the requirements for obtaining an authorisation to carry out such activities, which will contribute to introducing new securities classes such as derivatives, and guaranteeing the settlement and fulfilment of obligations of transactions parties, according to a statement to the Saudi Stock Exchange (Tadawul).

The decision is set to further strengthen the current market infrastructure and enhance its efficiency in line with the strategic objectives to develop the capital market and Saudi Vision 2030.

The Regulations define clearing as the process of establishing each party's rights and obligations arising from securities trading, including the calculation of net obligations and ensuring that financial instruments or cash are available to secure the exposures arising from such obligations.

During the preparation of the Regulations, the CMA took into consideration the best international practices in this regard and 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).