Settlement Cycle (T+2)
Goals of adopting a two business day settlement cycle
- Increase the level of asset safety for investors, by providing enough time to verify transactions and deal with errors should they occur.
- Align the Saudi Stock Market with leading global settlement practices, as this will open up new listing opportunities for the Saudi market among other global markets indices.
- Develop an environment that promotes institutional-level investments and meets necessary requirements for coping with any future changes.
What is meant by settlement?
The settlement of securities refers to the process of transferring securities from a seller’s portfolio to a buyer’s portfolio, whereas cash settlements refer to the process of transferring the value of securities for executed transactions from the buyer’s investment account to the seller’s investment account, through the exchange’s members.
The new settlement cycle (T+2)
The settlement cycle refers to the period between trade execution, registration of securities’ ownership transferal, and actual payment for the transaction value. The duration of the settlement cycle will be two business days on all transactions for securities listed in the market.
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Eligible securities for Securities Borrowing and Lending
All listed securities are eligible for SBL activities with the exception of Tradable Rights.
Eligible securities for Short Selling
All listed securities are eligible for short selling activities with the exception of Tradable Rights.