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Capital Market Overview


Exchange Information

Item Description
Currency Saudi Riyal (SAR)
Time Zone UTC + 3
Exchange The Saudi Stock Exchange (Tadawul) is a joint stock company and the sole entity authorized in the Kingdom to act as the Securities Exchange (the “Exchange”), carrying out listing and trading in securities

 

Depository

The Depository Center Company (SDC) as a closed joint stock company fully owned by Tadawul and the sole entity authorized in the Kingdom to act as the Securities Depository Centre (the “Centre”), carrying out deposit, transfer, clearing, settlement, and registry of ownership of securities traded on the Exchange

The legal status, duties, and responsibilities of the Exchange and Depository Center are explicitly defined in the Capital Market Law (the “CML”) issued by Royal Decree Number (M/30) dated June 16, 2003. The Exchange is also the official source of all market information. Tadawul is an affiliate member of International Organization of Securities Commissions (IOSCO), and a member of the World Federation of Exchanges, Arab Federation of Exchanges (AFE) and Africa and Middle East Depositories Association (AMEDA).

Trading System In 2015, Tadawul has successfully deployed NASDAQ’S X-Stream INET trading system. The system is regarded among the top trading platforms globally. Securities listed on the Exchange are traded by way of order matching according to price, and then time priority. Transactions are executed through brokers, each on behalf of its clients or itself.Trade finality and legal finality are simultaneously recorded on the trading system and depository and settlement systems.
Depository and Settlement System Equator CSD by NASDAQ.
Surveillance System SMARTS Surveillance by NASDAQ.
Security Identifiers ISIN (International Securities Identification Numbering).

Regulatory Landscape:

Relevant Regulatory and Supervisory Bodies Description
Capital Market Authority(CMA) The Capital Market Authority (“CMA"), established pursuant to the Capital Market Law, The CMA is a government organization with financial, legal and administrative independence. It reports directly to the president of the council of ministers. The CMA’s functions are to regulate and develop the Saudi Capital Market by issuing required rules and regulations for implementing the provisions of Capital Market Law. The basic objectives of the CMA are to create an appropriate investment environment, boost confidence, and reinforce transparency and disclosure standards in all listed companies, and moreover to protect investors and dealers from illegal acts in the market. CMA is a member of IOSCO.
Saudi Arabian Monetary Authority(SAMA) The Saudi Arabia Monetary Authority (“SAMA") is the regulator of the banking, insurance, and financing sectors. SAMA is the national central bank and is a member of the Bank for International Settlements, the Committee for Payments and Market Infrastructures and the Basel Committee for Banking Supervisors.
Ministry of Commerce and Investment (MCI) The Ministry of Commerce and Investment (“MoCI”) is responsible for regulating trade and its development, expanding the private sector, proposing and implementing relevant laws and rules including the Companies Law
Saudi Arabian General Investment Authority (SAGIA) The Saudi Arabian General Investment Authority ("SAGIA") was created as part of measures geared towards formalizing the process of economic liberalization. SAGIA is responsible for managing the investment environment in the Kingdom. Its objective is to achieve economic growth by creating a pro-business environment, providing services to investors and fostering investment opportunities in key sectors of the economy, including energy, transportation, ICT, and knowledge-based industries.
Saudi Organization for Certified Public Accountants (SOCPA) The Saudi Organization for Certified Public Accountants ("SOCPA") operates under the supervision of the Ministry of Commerce and Industry in order to promote the accounting and auditing profession and all matters that might lead to the development of the profession and improve its status.
Department of Zakat and Income Tax (DZIT) The Department of Zakat and Income Tax (“DZIT") is a government agency reporting to the Ministry of Finance responsible for assessing and collecting tax from persons subject to taxation.

Exchange Traded Instruments:

Opening Days Pre-Market Time Opening Times Settlement Cycle Market Making Minimum Lot Total Trading Commission Security Format
Exchange Traded Instruments
Equities  (MAIN MARKET & NOMU – PARALLEL MARKET)
Sunday - Thursday 09:30–09:59 10:00– 15:00 T + 2 No Market Makers 1 Share 15.5 bps Electronic Form
Sukuk / Bonds
Sunday - Thursday 11:15–11:29 11:30– 15:00 T + 2 No Market Makers Depends on Issue 10bps
(Min SAR500)
Electronic Form
Right Entitlements
Sunday - Thursday 09:30–09:59

 

10:00– 15:00

 

T + 2 No Market Makers 1 Right 12bps
(No Min)
Electronic Form
ETFs
Sunday - Thursday 09:30–09:59 10:00– 15:00 T + 2 Minimum of two Market Makers 1 Unit 12bps
(Min SAR12)
Electronic Form
REITs
Sunday - Thursday 09:30–09:59 10:00– 15:00 T + 2 No Market Makers 1 Unit 15.5 bps Electronic Form
Negotiated Deals
A trade in which the price of the listed security is bargained out between the buyer and seller through their respective brokers, with a minimum trade size of SAR1,000,000. The transaction price must be within ±10% of the previous day’s closing price. OTC transaction is also conducted for debt instruments.
Relevant Regulations
The Capital Market Authority Regulations  The Saudi Stock Exchange Regulations
  • AML CTF Rules
  • Offering of Securities Regulations
  • Listing Rules
  • Parallel Market Listing Rules
  • Swap Circular
  • Market Conduct Regulations
  • ETF Circular 
  • Real Estate Investment Traded Funds Instructions
  • M and A Regulations 
  • Instructions/Procedures for Listed Companies with Accumulated Losses reaching 50% or more of its Capital
  • QFI Rules 
  • The Exchange and Centre Procedures
  • Securities Depository Centre Rules
  • Short Selling Regulations 
  • Securities Borrowing and Lending Regulations 
  • Trading Procedures 

Equity Market Features (MAIN MARKET & NOMU – PARALLEL MARKET):

Opening Price

Auction based on the bids and ask entered during the Pre-Market.

Closing Price

Volume Weighted Average Price (VWAP) which takes the average price of trades that occurred in the last 15 minutes before market close, where the total of all traded value of a company is divided by the total traded shares of that company, the result is the VWAP closing price.

Tick Sizes

Price Bands Tick Size
SAR 25.00 or Below SAR 0.05
SAR 25.10 to 50.00 SAR 0.10
SAR 50.25 and above SAR 0.25

 Order Types

  • Limit Orders
  • Market Orders
  • Hidden Orders
  • Fill and Kill Orders
  • Fill or Kill Orders
  • Day Orders
  • Call Only Orders
  • Good Till Date Orders

Normal Trade Size

An executed trade with a value more than 15,000 SAR.

Fluctuation Limits

  Main Market Nomu-Parallel Market
Daily Upper Limit +10% from previous day’s closing +20% from previous day’s closing
Daily Lower Limit -10% from previous day’s closing -20% from previous day’s closing

Market Indices

  • Tadawul All Share Index (TASI)
  • Parallel Market Index (NOMU)
  • Energy
  • Materials
  • Capital Goods
  • Commercial & Professional Svc
  • Transportation
  • Consumer Durables & Apparel
  • Consumer Services
  • Media
  • Retailing
  • Food & Staples Retailing
  • Food & Beverages
  • Health Care Equipment & Svc
  • Pharma, Biotech & Life Science
  • Banks
  • Diversified Financials
  • Insurance
  • Telecommunication Services
  • Utilities
  • REITs
  • Real Estate Mgmt & Dev't

Index Calculation Method

(Current day’s total free float market capitalization ÷ previous day’s total free float market capitalization) x index value from the previous day.

Companies with Accumulated Losses Framework

Flag Accumulated Company Loss Percentage Settlement
 
20% to less than 35% of its capital T + 2
 
35% to less than 50% of its capital T + 2
 
50%or more of its capital T + 2

Accessibility By Market Participants:

‘Onshore’ Investors
Asset Classes Secondary Market Access Channel Voting Rights Public Offering Participation Private Placement Participation Capital Gains Tax/Zakat With-holding Tax Other Restrictions
Saudi Investors
Stocks Direct Access Yes Unrestricted Restricted to Sophisticated Investors 0% 0% Prospectus

Issuer Bylaws

Regulator Policies
Sukuk / Bonds Direct Access NA Unrestricted 0% 0%
Mutual Funds Fund Manager NA 10% of AUM 0% 0%
ETFs Direct Access NA Unrestricted 0% 0%
Resident Foreign Investors & GCC Resident Investors
Stocks Direct Access Yes Restricted Restricted to Sophisticated Investors 0% 0% Prospectus

Issuer Bylaws

Regulator Policies
Sukuk / Bonds Direct Access NA Restricted 0% 0%
Mutual Funds Fund Manager NA 10% of AUM 0% 0%
ETFs Direct Access NA Unrestricted 0% 0%
‘Offshore’ Investors
Asset Classes Secondary Market Access Channel Voting Rights Public Offering Participation Private Placement Participation Capital Gains Tax/Zakat With-holding Tax Other Restrictions
GCC Corporates (= 51% GCC Ownership)
Stocks Direct Access Yes Restricted NA 0% 5% Issuer Bylaws

Regulator Policies
Sukuk / Bonds Direct Access NA Restricted 0% 5%
Mutual Funds Fund Manager NA 10% of AUM 0% 0%
ETFs Direct Access NA Unrestricted 0% 0%
Non-Resident Foreign Investors
Stocks Direct / Indirect Yes Restricted NA 0% 5% Prospectus 

QFI Limits

Issuer Bylaws

Regulator Policies 
Sukuk / Bonds Direct NA Restricted 0% 5%
Mutual Funds Fund Manager NA 10% of AUM 0% 0%
ETFs Direct NA Unrestricted 0% 0%

Corporate Governance and Issuers Disclosure:

Item Description
Corporate Governance Market regulators have focused on the need for better corporate governance via legal and institutional reforms. These included passing the Corporate Governance Regulations ("CGR") issued by the Capital Market Authority pursuant to Resolution No. 1/212/2006 dated 21/10/1427H (corresponding to 12/11/2006G) which have been put into place to reflect international best practices, and further strengthen corporate oversight functions across issuers within the securities market.
Ultimately, robust corporate governance practices ensure that shareholders obtain all privileges pertaining to the ownership of shares in any given company. Specifically such privileges include the right to; obtain a share of corporate dividends, company assets in case of liquidation, attend and participate in shareholder assemblies and deliberations, vote on its decisions, monitor board of directors’ performance and file lawsuits against its members. Shareholders are also given the right to request information that does not compromise the company’s interests or conflict with the CMA’s implementing rules and regulations.
For further information about the Capital Market Authority,  For further information about the Capital Market Authority, the law and implementing rules and regulations that govern the securities market, please click on the following link  CMA.
Issuers Disclosure Annual reports provide a description of the issuer, information regarding the board of directors, officers, and staff. It includes a statement by management on current and future developments expected to have a significant effect on the company's financial position.
The CMA’s Listing Rules require all listed companies to disclose interim financial reports no later than 30 days after the end of the financial period, and their annual report no later than 3 months after end of the annual financial period.
Currently the Saudi Arabian Monetary Authority (SAMA, the central bank) requires banks and insurance companies in Saudi Arabia to report their financial statements under IFRS. Saudi Organization for Certified Public Accountants (SOCPA) standards apply to all other companies, listed and unlisted.
The Listing Rules require each company’s board of directors’ report to contain, amongst other pertinent disclosures, information relating to any businesses or contract to which the issuer is a party and in which a director of the issuer, the CEO, the CFO or any person related to any of them is or was interested.  For further information about the Capital Market Authority, the law and implementing rules and regulations that govern the securities market, please click on the following link CMA.

Corporate Actions & General Assemblies:

Dividend Payment Process

Dividends are announced through the official website of Tadawul. On the Record Date, the entitlements are determined and the entitlement advices sent. When the companies make cash dividend payments, they are credited to the client's cash accounts under advice.

Dividend Payment Frequency

  • Paid quarterly, semi-annually or annually at the discretion of the issuer.

Interest Payment Frequency

  • Paid quarterly, semi-annually or annually at the discretion of the issuer.

Interest Payment Calculation

  • Calculated based on 360 days.

Annual Financial Reporting

  • Within 3 months after the end of the annual financial period.

Interim Financial Reporting

  • Within 30 days after the end of the financial period.

Corporate Actions

Corporate Action Availability
Cash and Share Dividends Available
Stock Splits / Reverse Splits Unavailable – Fixed Par Value Regime (SAR10) – Companies Law
Buy – Backs Unavailable
Mergers / Acquisitions Available – Subject to the CMA’s M&A Regulations
Capital Reductions Available – Subject to the CMA’s Listing Rules
Rights Issues Available – Subject to the CMA’s Listing Rules
Delisting Available – Subject to the CMA’s Listing Rules

 General Assemblies

item description
Invitations/ Agendas Disseminated Publicly
Meeting Outcome Disseminated Publicly
Electronic Voting Available at Issuer’s Discretion – Tadawulaty Website / App
Power of Attorney / Proxy Voting Allowed

Post-Trade Features:

Item Description
Depository / Registrar The Securities Depository Center (the “SDC”), is the sole entity authorized to carry out the deposit, transfer, clearing, settlement, and registry of ownership of securities traded on the Exchange. 
Depository and Settlement System Equator CSD by NASDAQ.
Clearing Members The Clearing Members connected to the SDC. Cash settlement occurs 5 minutes after market close via the Saudi Arabian Riyal Interbank Express (“SARIE”) payment system operated by the Saudi Arabian Monetary Authority.
Settlement Model Model 2 of the Bank for International Settlements (“BIS”) settlement by which securities are settled on a gross basis, and cash settlement is on a net basis.
Settlement Currency All transactions are settled in Saudi Riyals.
Settlement Cycle Settlement cycles are explained under the “Exchange Traded Instruments” and “Stock Market Features” Tabs.
Registration Process All equities are automatically registered via book entry upon settlement through the SDC. Registration is in the beneficial owner's name with exception to the shares underlying Saudi Equity Swaps, which are registered in the name of the local Authorized Person party to the swap.
Short Selling Covered short selling is allowed for investors other than Natural Persons. Investors have to borrow securities before selling short.
Delivery versus Payment (DvP) Settlement is conducted according to BIS DvP Model 2 – gross settlement of securities, net settlement of funds.