Saudi bourse says to have T+2 settlement early 2017
[DUBAI] The Saudi Stock Exchange will introduce in early 2017 the settlement of trades within two working days of execution, it said on Tuesday, a reform that could help the market join global equity indexes and attract billions of dollars of foreign money.
The Capital Market Authority has approved the switch to T+2 settlement "during the first half of 2017", the exchange said in a statement, adding that the reform would deepen the market, improve trading eficiency and reduce risk.
At present, trades must be settled on the same day, a practice known as T+0. This has inconvenienced foreign investors in particular because they must have large amounts of money on hand before trading, which can be difficult given Riyadh's time zone and its Sunday-Thursday business week. Many big emerging markets have settlement after two days.
Saudi Arabia wants to join international index compiler MSCI's emerging markets index as soon as in 2017, and officials have conceded that T+0 is one obstacle to inclusion.
REUTERS
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Banking & Finance
Nomura, Mizuho face losses on All Blue fund’s failed trades
Stablecoin Tether steps up monitoring in bid to combat illicit finance
HSBC asked by US$890 billion investor group to set energy goal
Barclays is the latest firm to face anti-ESG wrath in Oklahoma
Barclays prices mortgage-backed notes in deal with GoldenTree
TD risks an earnings hit from US laundering probe, analysts say