Sun Apr 28, 2019 08:35:55

CMA, Tadawul and Debt Management Office Announce Enhancements to Sukuk and Bonds Market

The Capital Market Authority (CMA), the Saudi Stock Exchange (Tadawul) and the Debt Management Office (DMO) unveiled a number of enhancements to the fees and commissions’ structure of the Sukuk and Bonds Market in a joint effort to further develop the capital market. According to the enhancements, fees and commissions will be restructured for Sukuk and Bonds’ services that will include new key changes in fees and commissions for issuers, members, and investors.

According to the changes, Sukuk and Bonds issuers will benefit from Edaa’s reduced IPO file upload fees and annual registry fees. Also, the changes include reducing Tadawul’s annual listing fees for first and subsequent issuances of Sukuk and Bonds in addition to introducing caps for Tadawul’s annual listing fees for first and subsequent issuances. The DMO have also announced reducing the par values of governmental issued Sukuk from one million Saudi riyals to one thousand.

The changes for market members and investors will include deregulation of brokerage commissions and elimination of the minimum commission cap required. Trading commissions for Tadawul and CMA have also been reduced and CMA will waive the trading commission on all types of investors with the exception of special cases.

Edaa will introduce annual safekeeping fees for listed Sukuk and Bonds holdings to further support trading in the secondary market, including financing activities like securities lending and repurchase agreements to maximize the return on assets and recover the value of holdings.

His Excellency Mr. Mohammed Al Kuwaiz, Chairman of the CMA said: “Enhancing the effectiveness of debt instruments is key to achieving CMA’s strategy for advancing the capital market in line with the FSDP and Vision 2030”. He added: “This restructuring of fees showcases this cooperation to stimulate development of the debt market and encourage sukuk and bonds issuance and trading”

Mr. Fahad Al Saif, Head of the Debt Management Office (DMO), said: “Enhancing the fees will have a significant positive impact on Sukuk and Bonds market and encourage Sukuk and bonds issuance and trading in Governmental issued Sukuk and activate its secondary market”

Eng. Khalid Al Hussan, CEO of Tadawul, said: “These changes represent an important step in further enhancing the Kingdom’s capital market by encouraging issuers to list more Saudi currency sukuk and bonds in the public debt market and facilitating increased trading by investors which will result in greater market liquidity.” He added: “Increased liquidity of the debt market will, in turn, contribute to the issuance of more diversified debt instruments and introduction of new asset classes for investors “