The Saudi Stock Exchange announced the establishment of an independent central counterparty clearing house with a capital of 600 million Saudi Arabian riyals.
The clearing house, expected to be fully operational by the second half of 2019, will be responsible for developing future clearing in line with international risk management practices and standards, the exchange said May 2.
The Saudi stock exchange operator, also known as Tadawul, noted that it has already initiated with the Capital Market Authority and the Saudi Arabian Monetary Authority the necessary regulatory regime to set the clearing house function in motion.
Tadawul added that the clearing house will assist in diversifying investment opportunities in the local market through the introduction of other new asset classes such as derivatives and allow local companies to hedge against risks, as part of efforts to attract investors.
Wael Abdullah al-Hazzani was appointed CEO of the clearing house.
As of May 3, US$1 was equivalent to 3.75 Saudi Arabian riyals.
