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Frequently Asked Questions

What is Tadawulaty?

Tadawulaty is a service offered by Tadawul and includes a bundle of services for investors:

Consolidated Reporting, Electronic Voting, Dividends Entitlement Reports, Expected Dividends Notifications, Shares Certificate Search, and Tender Offers.

You can access Tadawulaty through your member’s website, or at www.tadawulaty.com.sa.

Who is responsible of collecting trading commissions?

Trading commissions will be collected by the executing broker.

What are the transfer fees?

SAR 20 per issuance transferred.

How is the opening price determined for Equities?

The opening price is determined through an opening auction. During the opening auction investors may place orders (bid/ask). The trading engine will determine an equilibrium price at which all possible matching orders are executed at the end of the auction (uncross). The execution price is the opening price.

When is the opening auction?

The opening auction starts at 9:30am and ends at 10:00am. The market opening is randomized on a daily basis between 10:00:00am and 10:00:30am.

How is the closing price determined for Equities?

The closing price is determined through a closing auction, similar to how the opening price is determined in the opening auction. 
The closing auction is a session after continuous trading where investors may place orders (bid/ask). The trading engine will determine an equilibrium price at which all possible matching orders are executed at the end of the auction (uncross). The execution price is the closing price and becomes the next day’s reference price.   
The closing price is calculated based on normal trades only (SAR15,000 and above). If there are no trades during the auction, then the closing price is the last traded price (LTP) during continuous trading. If there are no trades during the day, the closing price is the previous day’s closing price.

When is the closing auction?

The closing auction starts after continuous trading at 3:00pm and ends at 3:10pm. The market closing is randomized on a daily basis between 3:10:00pm and 3:10:30pm.

When will the closing price be determined?

The closing price will be determined during the closing auction and will be disseminated to the market at the end of the closing auction, at 3:10pm. The market closes randomly every day within 30 seconds after 3:10 PM, between 3:10:00 and 3:10:30 at maximum. 

Which securities apply a closing auction mechanism to determine the closing price?

The closing auction is applied to the Main Market and Nomu – Parallel Market as well as tradable rights.

What type of orders are permitted during the closing auction?

Permitted: Limit orders, market orders, hidden orders and session orders. 

Do negotiated deals affect the closing price?

Negotiated deals do not affect the closing price.

Does the closing auction affect indices calculation?

The closing price determined by the closing auction is the last traded price of the day; therefore, indices calculations are updated accordingly. 

 

What is the closing price in case no trades occurred during the day?

If there are no trades during the day, the closing price is the previous day’s closing price.

What is the closing price in case no trades occurred during the closing auction?

If there are no trades during the auction, then the closing price is the last traded price (LTP) during continuous trading. 

 

What is the Global Industry Classification Standard (GICS)?

The Global Industry Classification Standard (GICS) was developed by Morgan Stanley Capital International (MSCI) and Standard and Poor’s (S&P) in 1999 in response to the global financial community’s need for a reliable, complete and standard industry classification system. The GICS methodology is widely accepted as the industry analysis framework for investment research, portfolio management and asset allocation. Its universal approach to industries worldwide has contributed to increased transparency and efficiency in the investment process. The GICS has become an industry model widely recognized by market participants worldwide.The GICS structure has four levels of detail: 11 sectors, 24 industry groups, more than 60 industries, and more than 150 sub-industries.

What does it mean that GICS is a "market-oriented" classification system? Why does that matter?

There are two approaches to industry classification: production-oriented and market-oriented. The emergence of the service era and the availability of global communications have changed the market focus from producers to consumers. In today’s economy, for example, drawing the line between goods and services is increasingly difficult and arbitrary, as almost all goods are sold with a service. Thus, the distinction between consumer goods and services has been replaced by the more market-oriented sectors of “Consumer Discretionary” and “Consumer Staples,” which both contain goods and services sub-industries.

Describe the hierarchical categories of the GICS.

The GICS structure currently has four levels of detail: 11 sectors, 24 industry groups, more than 60 industries, and more than 150 sub-industries. Since the classification is hierarchical, at each of the four levels a company can only belong to one grouping.

How companies are allocated to its relevant sectors?

Companies are allocated to Sub‐Industries according to the definition of its principal business activity that generate the majority of the company’s revenues. Sub‐Industries are grouped into Industries in such a way that general industrial and economic themes are common to all companies in the Industry. The Industries themselves are aggregated into Industry Groups, which in turn are aggregated into Sectors.

How will New Sector Indices be created?

New Tadawul Sector Indices will be created based on GICS  Level 2 (Industry Group). The base date will be 8th of January. Pre Open value for New Sector Indices will be 5000 points (Base Value), to allow for better performance comparability given one unified starting point. For more info availability, New Sectors Indices will have a calculated history for 1 year backwards. As they are new, Change and Change % for New Sector Indices will start being published on the 2nd day of the creation of these indices.

What will happen to Tadawul’s old Sector indices?

Old sector indices will be discontinued. However, historical values will still be available for any historical analysis.

Why is this global classification system important?

The GICS was developed and is maintained by two leading global index providers. It has been specifically designed to classify companies globally – in both developed and developing economies. The GICS is designed to meet the needs of the investment community for a classification system that reflects a company’s financial performance. GICS provides global coverage of over 44,000 + active, publicly traded companies.

How will Tadawul’s Equity Market look like after the GICS adoption?

Previously Tadawul equity market consisted of 16 Sectors. After the GICS adoption Tadawul equity market will be based on 20 Industry Groups, which is Level 2 (Industry Group) in GICS hierarchical classification system.

Will Tadawul equity market be mapped to all 4 GICS levels?

Yes, however, only sector (Level 1) and industry groups (Level 2) will be published on the website.

How frequently are companies reviewed for potential GICS changes and how often does a company's GICS classification generally change?

Companies are reviewed annually upon publishing their annual reports to ensure that a company’s allocation is still relevant to its main line of business. Companies are also under constant surveillance for corporate actions. In general, a company’s classification will change owing to either changes in revenue sources or due to a major corporate action that redefines a company's primary line of business.

Who uses the GICS and how pervasive is the GICS in the international investment community?

There has been significant adoption of the GICS standard across all major groups involved in the investment process, including: Asset Managers, Brokers (institutional and retail), Consultants, Research, and Stock Exchanges. Globally the Investment community uses the GICS across the full spectrum of equity market management – including asset management, sector research, portfolio strategy, peer analysis, and client account reporting. The use of the GICS enables market participants to identify and analyze companies using a common global standard.

Which particular advantages do strategists, analysts and investors draw upon in applying the GICS across their analysis and global benchmark selection?

The use of this global standard helps strategists, analysts and investors compare companies outside of their local markets.The GICS establishes a common standard that enables asset owners, asset managers and investment research specialists to make local and global comparisons by sectors. The standardized classification system permits foreign investors to look into local markets and local investors to look out at the rest of the world when comparing stocks within the same sector. The GICS defines peer groups tightly and avoids grouping unlike companies together.

How adaptable is the GICS structure over time to Economic Changes?

The four-level GICS structure reflects equities in today’s global investment environment, yet is flexible enough to capture tomorrow’s developments. As the global economy changes, sectors, industry group, industries and sub-industries can be added or divided.

What are the advantages of applying the new (T+2) settlement cycle?

  • Increasing levels of asset safety for investors, and providing enough time to verify transactions and deal with errors should they occur. 
  • Activating the role of market makers in the stock market.
  • Aligning the Saudi Stock Market with leading global settlement practices, which will open up new listing opportunities for the Saudi market among other global market indexes. 
  • Developing an investment environment that promotes institutional-level investments and meets necessary requirements for coping with any future changes. 
  • Allowing short selling on condition of borrowing equities.

What does the letter (T) stand for? and what does the added number refer to?

The letter (T) stands for the term (Trade); i.e. transaction. 
As for the added number, it refers to the duration required for completing the settlement of a transaction.

Which types of securities will the new settlement cycle apply to?

The new settlement cycle will apply to transactions of securities listed in the market of all types (stocks, sukuk, bonds, Exchange-Traded Funds (ETFs), tradable rights), in addition to over-the-counter transactions (OTC).

What is meant by the duration of securities settlement cycle?

It is the period that starts when the sell and buy orders are matched, and ends when securities and cash settlements are completed.

What is the duration for the new settlement cycle of securities’ transactions?

In the new settlement cycle, all types of securities’ transactions are completed after two business days following the transaction execution date; i.e. (T + 2).

Does the transition from (T + 0) to (T + 2) settlement have an impact on traders in the Saudi capital market?

No, there is no impact on traders. Buyers can sell securities directly upon executing transactions with no need to wait for completing the settlement of securities. 
Also, sellers gain purchasing power that enables them to buy new securities directly upon executing transactions with no need to wait for completing the settlement of securities.

What is short selling?

Short selling is the action of selling borrowed securities; provided that the investor returns them to the lender within an agreed upon period.

What is the purpose of short selling?

Short Selling aims to increase liquidity in the market and activate the role of the market maker. It also helps investors in short selling transactions to gain profits.

What is the settlement of securities?

It is the process of transferring securities of executed transactions from the seller’s investment portfolio to the buyer’s investment portfolio.

What is borrowing securities?

Borrowing securities is the temporary transfer of securities from its owner (lender) to an investor (borrower) with an obligation to return them back to their owner at a future agreed upon date. A borrower shall provide and maintain financial collateral as agreed with the lender and shall at all times be not less than 100% of the current market value of the borrowed securities. The value of the collateral provided may be amended at the discretion of The Capital Market Authority.

What is the settlement of cash?

It is the process of transferring the value of securities for executed transactions from the buyer’s investment account to the seller’s investment account.

When is a settlement of securities completed?

A settlement is complete when securities and cash settlements are complete.

How is a transaction executed?

A transaction is executed by matching the sell order with the buy order.

What is the role of the custodian?

The custodian is the investor’s settlement and asset servicing agent in the market. It is used by the investor to support and manage pre and post trading activities in the market. The custodian will be assigned by the investor in the market for the following services:

  • Settlement: guaranteeing the settlement of all investor’s trades in the market. Responsible for receiving/delivering cash/securities.
  • Safekeeping: safeguarding investor’s assets.
  • Corporate actions: administers corporate actions on securities held such as securities dividends, tender offer, rights issue, etc.
  • Cash Management: maintains cash bank accounts, deposits, withdrawals and other cash transactions.
  • Reporting: provides the investor with information and analysis of the positions and performance of his/her portfolios.

Should the custodian transfer securities/cash to the executing member of the Exchange to place an order in the market?

No, The executing member only has “remote” access (without the ability to view the investor’s assets) to enter buy-sell orders on behalf of the investor. All executed trades will be reflected in the investors account held by the custodian. The executing member acts as an execution agent only and retains no investor balance on its own account as a result of any trade.

Is the Independent Custody service mandatory for investors?

It is not mandatory, the service is optional and investors may choose to use the current custody model (combined brokerage and custody) instead.

Can orders be cancelled or amended during the closing auction?

Yes, orders can be cancelled or amended during the closing auction.

What will happen if the order is not matched during continuous trading?

The order will move to the closing auction.

What will happen if the order is not matched during closing auction?

The order will behave according to the order validity

 

Can orders be placed after the closing auction (after 3:10pm)?

Yes. They may be placed at the closing price only in the trade-at-last session.

 

Where are the closing prices displayed on Tadawul’s website?

Companies Detail Quote
Historical Data (Performance Summary)
Detail Quote Non Adjusted
Last 6 traded days 
The closing prices are displayed in the following reports:
Daily Report
Weekly Report
Monthly Report
Quarterly Report
Annual Report
Daily Financial Indicators

Will the company's shares be suspended if the extraordinary general assembly issued its resolution to reduce the capital due to capital exceeding the company's need?

No. The Exchange suspend the trading of the company’s shares for two trading sessions following the end of the creditors’ objection period and effectiveness of the reduction resolution, which is announced when the extraordinary general assembly’s resolution is issued to reduce the capital.

Will the company's shares be suspended if the extraordinary general assembly issued its resolution to reduce the share capital due to amortization of losses?

Yes. The Exchange suspend the trading of the company's shares for two trading sessions following the issuance of the extraordinary general assembly resolution to reduce its capital.

What are the reasons that drive listed companies to buy-back their shares in the market?

A company buys back its shares to either achieve capital reduction or retain ownership as Treasury Shares.

By which purposes are listed companies allowed to buy-back their shares and use them as Treasury Shares?

According to Article 13 of the Regulatory Rules and Procedures issued pursuant to the Companies Law relating to Listed Joint Stock Companies, issued by the Board of the Capital Market Authority; a company may not buy-back its shares to use them as Treasury Shares except for the following purposes:
- If the Board or its authorized representative considers that, the share market price is lower than its fair value.
- To fulfill debt instruments holders’ right to convert them into shares in accordance with the terms and conditions of those instruments.
- Share swap transactions for the acquisition of shares or company ownership or an asset purchase.
- To allocate them to the company’s employees as part of an Employee Stock Ownership Plan.
- Any other purpose approved by the Capital Market Authority (CMA).

How can a listed company buy-back its shares?

In Article 12 of the Regulatory Rules and Procedures issued pursuant to the Companies Law relating to Listed Joint Stock Companies, the Capital Market Authority has listed several rules to govern share buy-back practices for listed companies.

What are Treasury Shares?

Purchased shares retained by a listed company for various objectives, including shares allocated to employees as part of its Employee Stock Ownership Plan.

Are listed companies allowed to sell Treasury Shares?

A listed company may sell its Treasury Shares if this is provided and permitted in its bylaws and in accordance with the rules that are stipulated in Article 22 of the Regulatory Rules and Procedures issued pursuant to the Companies Law relating to Listed Joint Stock Companies, issued by the Board of the Capital Market Authority.

Are there any restriction periods by which listed companies are not allowed to buy-back or sell their shares in the market?

Yes, there are restriction periods which precede the publishing of quarterly and annual financial statements as follows:
During the (15) calendar days preceding the end of the financial quarter and until the date of the company’s announcement of its reviewed interim financial statements.
During the (30) calendar days preceding the end of the financial year and until the date of the company’s announcement of its reviewed interim financial statements or its audited annual financial statements.

How can additional information on a company’s share buy-back and sell be obtained?

Additional information can be obtained through the following disclosures:


- Corporate Announcements on the official website of the Saudi Stock Exchange (Tadawul), where the company must announce the approval of the buy-back transaction and its conditions immediately after the relevant resolution of the Extraordinary General Assembly. The company is also obligated to announce results of any share buy-back transaction to the public upon completion of each transaction phase.
- Board’s Annual Report, which should contain details relating to Treasury Shares retained by the company and details on of the use of these shares.
- Market Reports on the official website of the Saudi Stock Exchange (Tadawul), where the Exchange publishes a comprehensive report (Listed Companies Share Buy-back Disclosure Report) updated by Tadawul to disclose all listed companies’ share buy-back ownership as of end of the quarter besides ownership as of end of the previous quarter for comparison on a quarterly basis.

How often and when is the Listed Companies Share Buy-back Disclosure Report updated?

The report published on Tadawul’s website is based on data provided and verified by listed companies. Neither Tadawul nor any of its subsidiaries bear any liability for the validity and integrity of the provided data. The report is updated on a quarterly basis to reflect the ownership of listed companies at the end of the last day of each quarter besides the ownership at the end of last day of the previous quarter for comparison.

How can the Listed Companies Share Buy-back and Sell Disclosure Report be viewed on Tadawul website?

The Listed Companies Share Buy-back Disclosure Report can be viewed on Tadawul’s website under:

Markets ® Reports and Publications ® Market Reports
Or by clicking on the link below:

https://www.tadawul.com.sa/wps/portal/tadawul/markets/reports-%26-publications/market-reports

What are Over the Counter (OTC) trades for suspended companies?

OTC trades is conducted when both parties agree off market on the trade volume and price. The trade is executed outside Tadawul's trading platform.

Common cases for converting a listed security to OTC trading?

  • Suspension of trading when the company does not disclose its financials.
  • Suspension of trading when an external auditor report includes a qualified opinion or a disclaimer opinion.
  • Suspension of trading when the company fails to comply with relevant rules and regulations.
  • Suspension of trading to protect investors or to maintain a sustained market.

Which listed securities are eligible for OTC trades?

Only suspended listed securities that the exchange specifies.

When are OTC trades available for listed securities?

After six days of announcing the suspension of a listed security.

What is the process for conducting an OTC trade?

  • A buyer and a seller agree off market on the trade price, volume, and trade date.
  • Both parties inform their brokers to execute the trade on their behalf.
  • The broker enters the trade on behalf of the buyer and the seller.
  • Cleared and settled through Edaa (T+2).

Main differences between on-exchange trades and OTC trades?

  ON EXCHANGE TRADE OTC TRADE
Order Book Yes No
Fluctuation Limits Yes No
Price Reporting Yes No
Trade Matching On Tadawul Trading Platform Off-market
Settlement Cycle T+2 T+2
Impact on Index(TASI/ Nomu/ MT30) Yes No
Historical Data Dissemination Yes No
Order Entry Through Tadawul and Edaa members Through Tadawul and Edaa members

Where are Foreign Companies share listed and traded?

Foreign companies shares are listed on both Tadawul and the foreign exchange mentioned in the company’s profile.

Do the shares traded on Tadawul have a separate ISIN code?

The ISIN code for the shares is the same across all markets the company is listed on, foreign companies’ shares are fully fungible across markets.

Are the shares listed on Tadawul part of the Main Market and Nomu – Parallel Market?

Yes, the shares of the foreign company are part of the Main Market and Nomu – Parallel Market.

In what currency are the foreign companies' shares traded on Tadawul?

Foreign companies’ shares on Tadawul are traded in SAR, the currency of the Saudi market.

In what currency are the dividends paid?

Shares held through the Saudi Securities Depository Centre Company (Edaa) will receive dividend payments in SAR on their Saudi accounts, converted at the exchange rate as disclosed by the Company and adjusted for taxes, if any.
 

If I trade shares of a foreign company listed on Tadawul, where will the shares settle?

Trades executed on Tadawul will clear and settle through Edaa.

Does the 49% foreign Ownership Limitation apply on the Foreign company?

Since the Foreign company is not a Saudi incorporated company, ownership limitations as applicable in the foreign jurisdiction will apply.
 

Does the 10% QFI ownership threshold apply on the foreign company?

Since the foreign company is not a Saudi incorporated company, ownership limitations as applicable in in the foreign jurisdiction will apply.    
 

Does an investor need to have an account in Edaa in order to trade shares on the Saudi Stock Exchange?

An investor should have an account in Edaa to trade in the Saudi Stock Exchange (Tadawul).

How much does it cost to trade shares on Tadawul?

The maximum trading commission on Tadawul is 15.5 basis points which includes brokerage, Tadawul, Edaa and CMA fees.

Where can I find more information about the foreign company?

Saudi investors can find more information on the foreign company’s website through their investor relation section where all publicly available information on the Company is available, or on the company’s profile section on Tadawul website. 
 

Are foreign companies listed on Tadawul subject to the same requirements as Saudi listed companies?

Yes, foreign companies listed on Tadawul are subject to the same listing, disclosure and governance requirements as Saudi listed companies.

Is the settlement cycle and depository services for foreign securities listed on Tadawul are the same as offered for listed domestic securities?

Yes, the post-trade process for foreign securities listed on Tadawul will be the same as listed domestic securities.

What is the settlement currency for the foreign security traded on Tadawul?

The settlement currency will be in Saudi Riyals (SAR).

How can investors transfer foreign securities from the foreign depository to Edaa?

  • To transfer securities from the foreign depository to Edaa, the investor should submit a request to the foreign depository, as per the requirements of the foreign depository. 
  • The foreign depository will validate the details provided by the investor and initiate the transfer to the custody account of the investor at Edaa.

How can investors transfer securities from Edaa to a foreign depository center?

  • To transfer securities from Edaa to a foreign depository center, the investor should submit a “Security Transfer Request” form to Edaa through a custody member. 
  • Edaa will validate the details provided by a custody member and initiate the transfer to the custody account of the investor at the foreign depository center.

Will the transfer be effective on the day of submitting the “Security Transfer Request”?

  • If the request for a transfer is submitted to Edaa at or before 11:00 am (GMT+3), the transfer will be executed on the same day. If the request is not executed, it will be planned for execution on the next business day.
  • For transfer forms submitted after 11:00 am (GMT+3), the transfer will be executed on the next business day in accordance with the work-days stipulated in the Saudi Labor Law. 

How are corporate actions key dates determined for foreign securities at Edaa?

Corporate action key dates for foreign securities will be timed in accordance to the market where they are primarily listed. 

How securities proceed from corporate actions provided?

Edaa will deposit the security proceeds from the corporate action event to the investor. Cash compensation for security fractions will comply with the primary market practice of the foreign security.

How are cash proceeds from corporate actions transferred?

The paying agent appointed by the issuer will provide the cash proceeds of the corporate action event to the investors of Edaa in accordance with the given corporate action.

What is the trade-at-last session?

The trade-at-last session is a continuous trading session where market participants may place orders only at the closing price formed as a result of the closing auction.

When is the trade-at-last session?

The trade-at-last session starts after the closing auction session from 3:10pm + random 30 seconds until 3:20pm

Which securities apply a trade-at-last session?

The trade-at-last session is applicable to the Main Market and Nomu – Parallel Market as well as tradable rights.

What types of orders are permitted during the trade-at-last session?

Permitted: Limit orders, Hidden orders, Negotiated Deals, Fill-or-Kill (FoK), and Fill-and-Kill (FaK) 

Not permitted: Market orders, Session orders

 

Can orders be cancelled or amended during the trade-at-last session?

Yes, orders can be cancelled or amended to the closing price only during the trade-at-last session.

Can orders be placed after the trade-at-last session (after 3:20pm)?

No. Orders can only be cancelled or amended after the trade-at-last session.

What is the difference between the Daily Limit and Static Limit for the Main Market and Nomu – Parallel Market?

Limit Main Market Nomu – Parallel Market
Daily Limit +/-30% for the first 3 days of newly listed Equities, REITS, & closed-end funds +/-30% for all listed securities on a continuous basis
On the 4th day onwards, the Daily Limit is set back to +/-10%
The Daily Limit is based on the Reference Price The Daily Limit is based on the Reference Price
Static Limit +/-10% for the first 3 days of newly listed Equities, REITS, & closed-end funds +/-10% for all listed securities on a continuous basis
On the 4th day onwards, the Static Limit will no longer apply during both continuous trading and opening/closing auction
Static Limit is based on the Static Price, during the following sessions which is:
  • Opening Auction: Previous days’ closing price
  • Continuous Trading: Last auction price, or the price that resulted from a Volatility Auction
  • Volatility Auction: Triggering order price
  • Closing Auction: Last auction price, or the price that resulted at the end of a Volatility Auction
Static Limit is based on the Static Price, during the following sessions which is:
  • Opening Auction: Previous days’ closing price
  • Continuous Trading: Last auction price, or the price that resulted from a Volatility Auction
  • Volatility Auction: Triggering order price
  • Closing Auction: Last auction price, or the price that resulted at the end of a Volatility Auction

What is the “Reference Price” in regards to the Daily Limits?

For the first day of listing: the reference price is the listing price

For second day onwards: the reference price is the previous days’ closing price, taking into consideration any adjustment in prices due to corporate actions

 

What is a Volatility Auction?

A Volatility Auction is an auction triggered any time during the continuous trading session when an order can potentially be matched at the upper or lower end of the Static Limit (+/-10%). A Volatility Auction lasts for 5 minutes and mimics the behavior of the Opening and Closing Auctions.

Is it possible to enter buy/sell orders during a Volatility Auction?

Yes, Market Participants may enter buy/sell orders during a Volatility Auction and the Exchange will disseminate a Theoretical Price and Theoretical Volume. A Volatility Auction lasts for 5 minutes and mimics the behavior of the Opening and Closing Auctions. At the end of the 5-minute Volatility Auction, the security will open with an updated price (Static price), which is the last Theoretical Price.

What is the Last Theoretical Price?

It is the price that results at the end of a Volatility Auction and is considered the new “Static Price”. Thus, Static Limits will be adjusted accordingly.

What happens at the end of Volatility Auctions if no Theoretical Price is reached?

In the absence of a Theoretical Price, the Static Price reverts back to the previous Static Price.

Can Volatility Auctions be triggered more than once?

Yes. Volatility Auctions are triggered when an order reaches the Static Limit, and this can potentially happen more than once during continuous trading.

What happens to the Volatility Auction triggering order?

The triggering order is a potentially executable order at the upper or lower Static limit. The order is not executed and will adjust the Static limit, meaning the Static Limit applied during the Volatility Auction is +/- 10% based on the triggering order’s price.

What type of orders and validity conditions are permitted during Volatility Auctions?

Permitted orders: Limit Orders, Market Orders

Permitted validity conditions: Hidden Orders and Session Orders.

Orders that are not permitted: Negotiated Deals.

Validity conditions not permitted: Fill-Or-Kill Orders, Fill-And-Kill Orders

What happens to unmatched Market Orders in Volatility Auctions?

At the end of all auctions, unmatched parts of any Market Order will be converted into Limit Orders at the last Theoretical Price. If the Theoretical Price is not formed, the trading system will cancel any outstanding Market Order, either unmatched or partially matched.

Can orders be cancelled or amended during a Volatility Auction?

Yes, orders can be cancelled or amended.

What triggers the Volatility Auction, and how is it applied on the Main Market and Nomu -Parallel Market?

Volatility Auctions are only triggered when the Static Limit is reached.

For Main Market securities; the Volatility Auction can potentially apply only in the first three days of listing new equities, REITs and CEFs if the static limit is reached. Since Volatility Auctions and Static Price Fluctuation Limits are correlated, Volatility Auctions will stop existing on the 4th day of trading newly listed equities, REITs and CEFs.

However, for Parallel Market-Nomu securities Volatility Auctions will be applied on a continuous basis for all securities.

What happens if the Closing Auction starts while orders are in Volatility Auction?

All orders will join the Closing Auction session, and uncross will take place at the end of the Closing Auction.

Example: If a Volatility Auction is triggered on a security at 2:57PM and given the Closing Auction starts at 3:00PM, the orders entered into the Volatility Auction starting 2:57 will merge with the Closing Auction starting at 3:00PM, and ending at 3:10PM + 30 second random uncross.

Which auctions may extend, and why?

Extensions only apply for Opening & Closing Auctions. The Exchange will automatically extend the Opening/Closing Auction on a security for a period of 2 minutes if at the end of the Opening/Closing Auction there are unmatched market orders, or if the Theoretical Price is at the upper or lower end of the Static Limit (+/- 10%). In this event, the security opens/closes randomly within 30 seconds between 3:12:00PM and 3:12:30PM. The Trade-at-Last session will always start after the Closing Auction uncross and end at 3:20pm.

Example: If there are unmatched market orders or the Theoretical Price is at the upper of lower end of the Static Limit (+/- 10%) at the end of the Closing Auction at 3:10PM, the Closing Auction will extend to 3:12PM and close randomly between 3:12:00PM and 3:12:30PM. The Trade-at-Last session will start immediately after the closing and will end at 3:20:00PM. The Trade-at-Last session does not extend. 

Does the Extension of the Opening and Closing Auctions include Volatility Auctions as well?

No, the two-minute extension on the Opening and Closing Auctions do not apply to Volatility Auctions. A Volatility Auction is a separate auction held during continuous trading.

Will the Trade-At-Last session be affected by the extension of the Closing Auction?

No. Regardless of an extension of the Closing Auction, the Trade-at-Last session will always start after the Closing Auction uncross and end at 3:20pm.

What is the fluctuation limit applied on Negotiated Deals?

The Daily Limit applies to Negotiated Deals.

Example: For Main Market securities, Negotiated Deals placed during the first three days of listing new equities, REITs and CEFs are subject to the Daily Limit of +/-30%. Negotiated Deals placed on the 4th day onwards are subject to the Daily Limit of +/-10%.

As for Nomu – Parallel Market, Negotiated Deals are subject to the Daily Limit of +/-30%, which is applied on a continuous basis for all securities.

What is a Negotiated Deal?

A trade negotiated between a buyer and a seller outside of the order book. These trades are pre-agreed price and quantity. These trades must meet the requirements determined by Tadawul. More details on the requirements can be found in the Trading and Membership Procedures which is available on Tadawul’s website via Exchange and Centre Rules and Regulations

What is the trading commission on a Negotiated Deal?

The trading commission on Negotiated Deals is similar to the commission applied to regular market trades.

What are the requirements in order to conduct a Negotiated Deal?

There are two requirements that a Negotiated Deal must meet in order to be allowed for execution. The two requirements are; Size requirement and Price requirement.

What is the Size Requirement for Negotiated Deals?

The size requirement to conduct a Negotiated Deal on the Main Market on a given security is to meet the minimum size requirement for the tier that the security falls in which is determined by Tadawul and published on Tadawul’s website.

What is the Price Requirement for Negotiated Deals?

The price of a Negotiated Deal must fall within the Daily Price Fluctuation Limits.

How can the minimum size requirement for Negotiated Deals be known?

There are four tiers with predefined minimum size thresholds. Each security listed on the Main Market will be classified into one of these tiers. Tadawul publishes the minimum size for each of the four tiers and the list of securities in each tier on Tadawul’s website. The list of securities will be updated twice a year; first day of January and first day of July.

How is the Size Requirement for Negotiated Deals determined?

Based on the security’s Average Daily Traded Value during the previous six months. The process of classifying the Main Market securities into the four tiers occurs twice a year; first day of January and first day of July.

What is the size requirement for Negotiated Deals on Tradable Rights?

Negotiated Deals size requirement on Tradable Rights is SAR 1 Million in the Main Market and SAR 300,000 in Nomu – Parallel Market.

What is the size requirement for Equities resuming trading in the Main Market and Nomu – Parallel after a suspension period?

Equities are classified into tiers, disclosed on Tadawul website on the first day of January and the first day of July, and reflective of the last 6 months Average Daily Traded Value.. Equities which have been suspended for the duration of the 6 month period with a SAR 0 Average Daily Traded Value due to suspension, will be classified as per the lowest tier of SAR 300,000.

For Nomu – Parallel Market, the size requirement is SAR 300,000 for all listed Securities, regardless of suspension.

What is the minimum size requirement for Negotiated Deals conducted on newly listed companies on the Main Market?

SAR 1 million during their first six-month period. Then, they will be classified into one of the predefined tiers based on their previous six-month Average Daily Traded Value in the next update after completing a full six-month period after listing.

What is the minimum size requirement for Negotiated Deals conducted on transitioning companies from Nomu – Parallel Market to the Main Market?

SAR 1 million during their first six-month period. Then, they will be classified into one of the predefined tiers based on their previous six-month Average Daily Traded Value in the next update after completing a full six-month period after listing.

What are the fluctuation limits that are applied for Negotiated Deals?

Only the Daily Price Fluctuation Limits apply for Negotiated Deals.

In which sessions are Negotiated Deals allowed to be executed?

Negotiated Deals are allowed to be executed during the Continuous Trading Session and Trade-at-Last Session.

Are Negotiated Deals allowed to be executed during auctions?

No, Negotiated Deals are not allowed to be executed during any auction.

Are Negotiated Deals allowed during Trade-at-Last session?

Yes, Negotiated Deals are allowed to execute during Trade-at-Last only if placed at the Closing Price in addition to meeting the Size Requirement.

What is the settlement cycle for Negotiated Deals?

It is the same as settlement cycle for regular trades of T+2.

On which securities can Negotiated Deals be executed?

Negotiated Deals are allowed to be executed on all listed securities. However, there are different requirements for different listed securities.

What is the minimum size for Negotiated Deals conducted on securities listed in Nomu-Parallel Market?

SAR 300,000 is the minimum size requirement for Negotiated Deals conducted on securities listed in Nomu – Parallel Market.

What is meant by the bilingual disclosure by Issuers, and when will it be enforced?

It is meant that to disclose in both Arabic and English languages ​​for all disclosures published on the Saudi Stock Exchange website (Tadawul). It will be enforceable starting from January 1, 2021.

 

Is bilingual disclosure in both Arabic and English is mandatory for all issuers whose securities are listed on the main market?

Yes, it is mandatory for all listed securities in the main market for all disclosures and reports published on the Saudi Stock Exchange website (Tadawul) through the designated system that the market determines for this purpose in accordance with the listing rules.

Is the bilingual disclosure in both Arabic and English mandatory for all issuers whose securities are listed on the parallel market "Nomu"?

For all listed securities in the Parallel Market (Nomu), disclosure will be mandatory in Arabic language, and the Issuer can translate any of that to English for all disclosures and reports through the designated system that the market determines for this purpose in accordance with the listing rules.

What is the purpose of mandating bilingual disclosure in both Arabic and English languages?

This change aims to improve the means of disclosure and provide the necessary tools to enable investors to reach to all the information that helps them in making their decisions and to raise the level of transparency and disclosure in the market in line with the Kingdom's Vision 2030 and the financial sector development program, one of it’s approved pillars is the development of an advanced financial market and to provide equal opportunities for all types of investors to reach the disclosures published on the Saudi Stock Exchange website (Tadawul).

What is meant by bilingual disclosure of reports?

It means all the reports that are published by the Issuers in accordance with the relevant rules and regulations.

What are the main requirements that the Issuers must comply to with regard to disclosure in Arabic and English?

The disclosure should be clear, correct and not misleading, and that it fulfills all the disclosure requirements stipulated in Chapter Five of the Listing Rules for Continuing Obligations, Regulations, Implementing Regulations and Market Rules, as all the rules and regulations are published in both languages.

What are the obligations of the liaison officer authorized by the issuer to disclose information?

To be a holder of professional certificate of disclosure.

To be aware of all relevant rules, regulations and market rules and to fully comply to it.

The disclosures and reports are submitted through the submitter and then approved by the supervisor to ensure the quality of the information provided to the public.

Does the designated system specified in the listing rules for disclosure enable Issuers to submit bilingual disclosure in both Arabic and English?

Yes. The designated system for disclosure enables all Issuers to publish all disclosures in both Arabic and English in an easy and accessible method, and helps Issuers to disclose in both languages.

How can the investor view and read the disclosures or reports published in the English language?

All announcements published in English will be available on the Saudi Stock Exchange website (Tadawul) in the English version and on the company profile page as well.