The Securities Depository Center Company (Edaa), a subsidiary of the Saudi Tadawul Group, and Clearstream, the international central securities depository of Deutsche Börse Group, have signed a Memorandum of Understanding (MoU) to partner with the objective to jointly introduce new post-trade services.
The initial focus is the joint development and launch of the Saudi Collateral Management Service (SCMS), a centralized domestic triparty capability to automate and optimize financing and collateral management in the Saudi capital market. Edaa was established in 2016 and is fully owned by the Saudi Tadawul Group. It operates and maintains the Depository and Settlement System to record and maintain securities and register the ownership of securities on the Saudi Exchange.
The collaboration between the two central securities depositories (CSDs) aims to enhance the efficiency and attractiveness of the Saudi capital market for both domestic and international investors. It builds on Clearstream’s initiative in 2021 to provide its clients access to the Saudi domestic market via Edaa. Leveraging its extensive global expertise, Clearstream will work with Edaa to advance the local post trade infrastructure and introduce new services including collateral management, securities lending and borrowing, fund services, and digital securities.
A key initial focus is the joint development and launch of the Saudi Collateral Management Service (SCMS), which will provide a centralized, automated triparty collateral management system. It is designed to enable optimized and automated financing activities for local financial institutions, increase liquidity in the Saudi market and provide easy connectivity to international markets.
Hanan Alshehri, CEO of Edaa, said in a statement “Our Partnership with Clearstream marks a vital step in our endeavors to enhancing the overall efficiency and liquidity of the Saudi capital market. It is a testament to Edaa’s continued commitment to strengthening the Saudi market infrastructure in line with international best practices.”
Sam Riley, CEO of Clearstream Securities Services, said in a statement: “Our collaboration with Edaa is a key part of our commitment to connecting global investors with emerging and dynamic aim to boost market liquidity and efficiency, supporting market participants with sophisticated tools to meet their investment and growth ambitions.”