Edaa, Clearstream announce linkage to hike global investor access to Saudi capital market from June 14

Logos of the Securities Depository Center (Edaa) and Cleastream

The Securities Depository Center Co. (Edaa) said that Clearstream, a post-trading service provider for Deutsche Börse Group, will begin to connect the Saudi capital market to its network, where it is responsible for the operation and maintenance of the deposit and settlement system.

Clearstream is the first international central securities depository (ICSD) to offer international investors access to the Saudi capital market. Its eligible clients will be allowed to access and trade on Tadawul commencing June 14, 2021, through the indirect linkage that will be established via HSBC Saudi Arabia who will act as the local custodian for Clearstream.

This step will give international investors seamless access to the Saudi capital market by enabling settlement of Saudi-listed government bonds, non-convertible corporate bonds and ETFs denominated in Saudi Riyal (SAR), in addition to being able to use their existing accounts at Clearstream.

International investors will be eligible to hold Saudi fixed-income securities and ETFs via a foreign nominee omnibus account structure, benefitting also from the usual suite of ICSD services, including offshore (internal) settlement.

The depository center also expected an increase in demand for Saudi government bonds from cross-border investors, thereby improving liquidity in the domestic market.