Clearstream linking to Saudi’s CSD and settlement system via HSBC custodian

  • Clearstream will open connection to the Securities Depository Center Company (Edaa) on 14 June 2021
  • International Central Securities Depository (ICSD) link permits cross-border investor access to the Saudi Sukuk and bonds market and listed exchange-traded funds (ETFs)
  • International investors will not need to apply for Qualified Foreign Investor (QFI) status

Clearstream, the post-trading services provider of Deutsche Börse Group, will connect the Saudi capital market to its network through a linkage with the Securities Depository Center Company (Edaa), a company fully owned by Saudi Tadawul Group and responsible for operating and maintaining the Depository and Settlement System (DSS).

Clearstream is the first ICSD to offer international investors access to the Saudi capital market. Its eligible clients will be allowed to access and trade on the Saudi Exchange commencing 14 June 2021 through the indirect linkage that will be established via HSBC Saudi Arabia who will act as the local custodian for Clearstream. This step will give international investors seamless access to the Saudi capital market by enabling settlement of Saudi Exchange-listed government bonds, non-convertible corporate bonds and ETFs denominated in Saudi Riyal (SAR).

The linkage comes following the Saudi Capital Market Authority’s (CMA) recent approval of Edaa’s international central securities depository (ICSD) instructions, aiming to develop a consistent regulatory environment in alignment with international best practices. It also represents Edaa’s efforts to support the development of the Saudi capital market and sustain Saudi Arabia’s competitiveness ranking among its G20 peers.

Raed Alhumaid, CEO of Edaa, said in a statement: “We are keen to partner with a leading post-trade services provider as we seek to create strong links with global depositary centres to introduce advanced services for market participants. The linkage with the International Central Securities Depository Clearstream reflects our efforts to facilitate the access of international investors to the Saudi capital market, while strengthening bridges between local issuers and foreign investors, especially in regards to debt instruments listed on the Saudi Exchange, this is in line with the objectives of the Financial Sector Development Program, part of Vision 2030.”

Read the full release

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