Derivatives are contracts between two parties, whose terms & conditions are set today, to deliver a certain asset at a future date.
From its name Derivatives are contracts that derive their price from an underlying which can be stock, index, etc.

Derivatives products are alternative trading instruments that offers trading and hedging opportunities for clients. Derivatives offer embedded features in their products such as short selling and leverage.

Like any other security, knowledge is key to start trading. Derivatives are perceived as more complex and sophisticated products that require deeper knowledge of uses, risks, and benefits.

There are two main of derivatives products:

1: Exchange traded: which include futures and options and are only trade on regulated exchanges (the type Saudi Exchange are planning to launch).
2- Over the Counter (OTC): which include Forwards and swaps and are not traded on a regulated exchange.
 

MT30 Index Futures is the first product in Derivatives Market and it is an index futures that tracks MT30 index

All institutional and corporate clients, Individuals as well as Individual derivative portfolio managers (DPMs). A suitability assessment will be conducted by participating members.

The trading hours are from 09:30 to 15:30.

Long means buy a contract, short means sell a contract.

Short selling of futures contracts is allowed. Short selling futures is a popular trading and hedging strategy. No borrowing or lending of the underlying (asset) is necessary.

Initial margin is the minimum amount the trader deposits with the broker to trade the futures. Initial margin is prescribed by Muqassa (the clearing house). However, the brokers have the right to ask for higher initial margin depending on the risk profile of the customer.

The margin multiplier is the number by which the minimum percentage margin, required by the Muqassa, have to be multiplied to form the margin required by the clearing member from his clients for newly entered position.

The futures price can fluctuate on a daily basis, which can create a profit or a loss. The variation margin or mark to market (MTM) is the adjustment of profit or loss made for the day.

Investors registered in the issuer’s share book at the end of the day (inventory i.e. settled position) are eligible to attend GM and vote.

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.

Put simply, an equity is a share in a company. Equities refer to the publicly traded shares of a company listed on the Saudi Exchange. Owners of these shares become part owners of the company. This gives them the right to have a say in how the company is run and to receive part of the company’s profits in the form of dividends.

There are many reasons for investing in equities, including the following.

• The money you invest (your capital) has the potential to grow over time.
• You can receive regular payments from your investment in the form of dividends.
• Equities can help you spread risk when used as part of a diversified investment portfolio. This is because different types of investment act in different ways and can go up and down at different times.

With the potential for higher returns comes higher risk

Equities can be volatile, meaning their value can rise or fall sharply at any time. So, when you sell shares, you could get back less than you invested. You could even get nothing back. If a company goes out of business, its shareholders are likely to lose all their investment. Equity investors may not be prioritized for pay-outs if a company's assets are disposed of. 

Saudi Exchange offers issuers the choice of two principal markets - the Main Market and Nomu-Parallel Market. The Nomu-Parallel Market was established in 2017 and is intended for SMEs. It has lighter listing requirements and provides an alternative route for smaller companies to go public. Investment in Nomu is restricted to qualified investors. 

The main market is the flagship market of the Saudi Exchange. It hosts over 200 publicly traded companies and is one of the world’s largest stock markets.

Transactions are executed through Exchange Members, each on behalf of its clients or itself.

Nomu is a parallel equity market with lighter listing requirements that serves as an alternative platform for companies to go public. The investment in this market is restricted to Qualified Investors.

Given that Nomu – Parallel Market is restricted to Qualified Investors, Authorized Persons (APs) must determine who is eligible. Qualified Investors are defined as per the below criteria:

• Authorized Persons act for their own account.
• Clients of an Authorized Person who conduct managing activities provided that this Authorized Person has been appointed as an investment manager on terms which enable making decisions concerning the acceptance of an offer and investment in Nomu - Parallel Market on the client’s behalf without obtaining prior approval from the client.
• The Government of the Kingdom, any government body, any global/international authority recognized by the CMA or the Exchange, and any other stock exchange recognized by the CMA or the Securities Depository Center Company (“Edaa”).
• Government-owned companies either directly or through a portfolio managed by a person authorized to carry out managing activities.
• Companies and funds established in a member state of the Cooperation Council for the Arab States of the Gulf.
• Investment Funds.
• Non-resident foreigners permitted to invest in the Parallel Market and who meet the requirements stipulated in the Guidance Note for the investment of Non-Resident Foreigners in the Parallel Market.
• Qualified foreign financial institutions.
• Legal persons allowed to open an investment account in the Kingdom and an account at the Securities Depository Center Company (“Edaa”).
• Natural persons allowed to open an investment account in the Kingdom and an account at the Securities Depository Center Company (“Edaa”), and fulfil any of the following criteria:
• Has conducted transactions in capital markets of not less than SAR 40 million in total and not less than ten transactions in each quarter during the last twelve months.
• Holds net assets not less than SAR 5 million.
• Works or has worked for at least three years in the financial sector.
• Holds the General Securities Qualification Certificate "CME-1", which is recognized by the CMA.
• Holds a professional certificate that is related to dealing with securities and accredited by an internationally recognized entity.
• Any other persons prescribed by the CMA.
   

• Market with lighter requirements.
• Restricted to Qualified Investors.
• Possibility of transition to Main Market after obtaining needed approvals.

• The Offering & Listing process takes the following criteria into consideration:
• The issuer must be a joint stock company.
• Minimum market cap of SAR 10 million.
• The issuer must float at least 20% of the issued shares at the same time of listing, or SAR 30million worth of shares in the market, whichever is less.
• Minimum 1 year of operational and financial performance.
• Appointing a financial advisor is mandatory, legal advisor is optional.
• Annual audited financial statements.
• Semi-annual* reviewed financial statements.
• Disclosure of material information.
• No profitability track record required.
• Lock up Period: 100% of pre-offering investor shares for one year.
• At least 50 public shareholders are required at the time of listing.

Nomu - Parallel Market will open new investment opportunities to all types of companies – including SMEs - which play a key role in leveraging the national economy and accelerating development.

Qualified foreign investors according to the Rules for Qualified Foreign Financial Institutions Investment in Listed Securities.

The ultimate beneficiary in a Swap agreement with an authorized person.

A legal person allowed to open an investment account in the Kingdom and an account at the Depositary Center and is licensed or incorporated in a jurisdiction that applies regulatory and monitoring standards equivalent to those applied or accepted by the Authority in accordance with the list of jurisdictions issued by the Authority.

Natural person holding the nationality of a country that applies regulatory and monitoring standards equivalent to those applied or accepted by the Authority in accordance with the list of jurisdictions issued by the Authority, and resides in such countries.
 

The Non-Resident Foreign Investor can trade in Nomu – Parallel Market and Debt Market.

An IFI can open a Depository Center account through the local Authorized Person after completing the following requirements:

• Fill the Edaa (Depository Center) account form.
• Copy of passport, certificate of incorporation, commercial register, or equivalent documentation.

The Authorized Person should send the requirements to the Edaa Center in both printed and electronic forms. The electronic copies should be sent to the following email address:
cc@edaa.com.sa

Investment limitations set forth in the articles of association (by-laws of the listed company, or any instructions issued by the supervisory or regulatory authorities to which the listed company is subject to), will be available under each issuer’s profile page; under the label “investment limits”. 

Foreign ownership information will be available on the Saudi Exchange website, and it will be updated on a daily basis after the market closes.

Foreign ownership reports will enclose:

• Maximum ownership percentage per issuer and existing ownership percentage per issuer by all foreign investors.
• The foreign ownership information can be found in the “(INSERT)” web page, under the “(INSERT LINK)”. 

It means ceasing the trading of the issuer's shares in the Parallel Market, based on the Exchange’s approval of the request submitted by the issuer to transfer to the Main Market for a period not exceeding five trading sessions, in order to complete the transfer procedures and make the issuer's shares available in the Main Market. Noting that the Exchange announces that when its decision is issued on its website. The announcement includes all the details, including, but not limited to: the start date of trading the issuer’s shares in the Main Market, the code, the sector, and the fluctuation limit.

Has conducted transactions in capital markets of not less than 40 million Saudi riyals in total and not less than ten transactions in each quarter during the last twelve months.

Holds net assets of not less than 5 million Saudi Riyals.

Works or has worked for at least three years in the financial sector.

Holds the General Securities Qualification Certificate "CME-1", which is recognized by the CMA.

Holds a professional certificate that is related to dealing with securities and accredited by an internationally recognized entity.

A share buyback, also called a share repurchase or stock buyback, is the process by which a company buys its own shares from a public market. It represents an alternate and more flexible way of returning funds to those who own shares in the company.

A company buys back its shares to either achieve capital reduction or retain ownership 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 fulfil 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).

In Article 12 of the regulatory rules and procedures issued pursuant to the law relating to listed joint stock companies, the Capital Market Authority has listed several rules to govern share buy-back practices for listed companies.

Purchased shares retained by a listed company for various objectives, including shares allocated to employees as part of its employee stock ownership plan.

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.

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.

Additional information can be obtained through the following disclosures:

• Corporate Announcements on the official website of the Saudi Exchange, 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 Exchange, where the Exchange publishes a comprehensive report (Listed Companies Share Buy-back Disclosure Report) updated by the Saudi Exchange to disclose all listed companies’ share buy-back ownership as of the end of the quarter besides ownership as of the end of the previous quarter for comparison on a quarterly basis.
   

The report published on Saudi Exchange’s website is based on data provided and verified by listed companies. Neither Saudi Exchange 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 compar

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

(Market Reports) Or by clicking on the link below:

Listed Companies Share Buy-back Ownership Report

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 their portfolios.

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.

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

Short selling is when an investor sells a security that has been borrowed, according to Edaa’s Securities Borrowing and Lending Regulations. When an Exchange Member places a sell order of borrowed securities as per Edaa rules, the order must be flagged as a short sell order in the Trading System to differentiate it from a regular sell order.

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.

The Global Industry Classification Standard (GICS) provides a reliable, complete and standard industry classification system used across the majority of international financial markets and institutions. Its universal approach to industries worldwide has contributed to increased transparency and efficiency in the investment process. The GICS structure has four levels of detail: 11 sectors, 24 industry groups, more than 60 industries, and more than 150 sub-industries. GICS was introduced to the Saudi capital market on (DATE).

Tadawulaty is a service offered by Tadawul and includes a bundle of services for investors:
These include 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 (INSERT LINK).

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

Borrowing a security involves the temporary acquisition of a security by an investor (borrower) from its owner (lender) with an obligation to return them back to the owner at an agreed upon date in the future

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.

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

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

The subscription process occurs by the submission of subscription applications at any of the branches of the recipient bodies (mentioned in the prospectus) or through trading applications or any other channels the brokers provide to their clients.

No, it is not possible.

The opening price of the share will be the difference between the closing price of the company’s share on the day preceding the inclusion of the Right and the offering price (Indicative Value). For example, if the share’s closing price on the preceding day is SAR 35 and the offering price is SAR 10, then the opening price of the Pre-emptive Rights will be 35-10 = SAR 25.

Pre-emptive Rights are tradable securities issued by a Company which grant their holder the right to subscribe for new cash Shares offered upon the extraordinary General Assembly’s approval of the capital increase through the issuance of new Shares. Each pre-emptive right grants its holder the right to subscribe for one new Share at the offer price.

No, the holder may not. After the end of the trading period, the holder will only be eligible to exercise their Right to subscribe to the capital increase or not. In case of refraining from exercising the Rights, the investor may be subject to loss or depreciation in their investment portfolio.

In case of refraining from subscription to all of the new shares during the first and second phases, the remaining new shares will be offered for subscription to be managed by the subscription manager and the value of indemnity, if any, to the holder of Rights will be calculated after deducting the subscription value and any fees according to the standards specified in the prospectus.

Yes, the investor can sell a part of these Rights and use the proceeds of this sale utilize the remaining Rights for subscription to the new shares.

Yes, the purchaser is eligible to sell the Rights and buy other Rights during the trading period.

The Registered shareholders can subscribe to additional shares by buying new Rights during the trading period.

Yes, the holders of share certificates are eligible to subscribe, however, they can only trade after depositing the certificates in electronic portfolios through the recipient companies or Securities Depository Center Company (“Edaa”) and provision of the necessary documents.

The currently applied commission on trading pre-emptive rights (buy/sell) is (15.5 bps) fifteen point five basis points at maximum, which could be subject to change in future.

Investors registered in the issuer’s share book at the end of the day (inventory i.e. settled position) are eligible to receive CA’s proceeds. And it is two business days after EGM.

The investor is notified of the Pre-Emptive Rights through Tadawulaty portal services provided by Securities Depository Center Company (“Edaa”) and short text messages to be sent through the brokers.

Both trading and subscription will start simultaneously until trading ends on day 6, while subscription continues until day 9. The trading period shall be determined in the prospectus and announcements of the issuing Company. 

The unregistered shareholders can subscribe after buying the Pre-emptive Rights during the trading period.

Based on their eligibility and in proportion to the percentage they each own in the share capital by the end date of the extraordinary General Assembly meeting.

This will be calculated by dividing the number of offered shares by the number of existed and issued shares. For example, if the number of the issued shares of company (A) is 1000 shares and this company increased its capital by offering 200 new shares, the offering ratio will be 200/1000 = 1/5, therefore each registered investor will earn one right for every five shares.

The investor’s share will be distributed on the portfolios owned by the investor according to the ownership rate in each portfolio at the same offering ratio announced by the company. In case of the presence of fractions, these fractions will be summed up and if they formed one or more integers, the integer will be added to the portfolio in which the investor owns the largest quantity of Rights.

The acquired pre-emptive rights will appear in the portfolios of Registered Shareholders under a new symbol that designates these rights and cannot be traded and subscribed for except in accordance with what is disclosed in the Prospectus.

It is the day where the rights are credited to the investors’ accounts.

A trade negotiated between a buyer and a seller outside of the order book. These trades are undertaken at a pre-agreed price and quantity. These trades must meet the requirements determined by The Saudi Exchange and once agreed are subject to the usual clearing and settlement procedures on the market, including a T+2 settlement cycle unless Buyer and Seller agree on a different settlement cycle from T+0 to T+5. 

There are two requirements that a negotiated deal must meet in order to be allowed for execution - the size requirement and the price requirement. The precise size requirement for negotiated deals to be undertaken depends on which one of four size tiers with predetermined thresholds the security falls in. Different size thresholds apply for companies on the Main Market and Nomu Parallel Market, for newly listed companies on both the Main Market and Nomu and companies who have recently transitioned from Nomu to the Main Market. 

More details on the requirements and size thresholds for negotiated deals can be found at [Negotiated Deals Minimum Size Requirement] 

The Saudi Stock Exchange is open Sunday through Thursday from 10AM to 3PM Arabian Standard Time (GMT +03:00)

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.

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.

In Nomu – Parallel Market, the closing price is calculated based on normal trades only (SAR2,500 and above). If there is no trades during the auction, then the closing price is the Last Traded Price (LTP) during continuous trading. If there are o trades during the day, the closing price is the previous day's closing price. 

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.

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.

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

•    Permitted: 
•    Limit orders 
•    Market orders
•    Hidden orders
•    Session orders 

Negotiated deals do not affect the closing price.

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

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

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

The order will move to the closing auction.

The order will behave according to the order validity.

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

• 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

No. The exchange suspends 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.

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

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.

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.

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.

In the absence of a theoretical price, the static price reverts to the previous static price.

Yes. Volatility auctions are triggered when an order reaches the static limit, and this can potentially happen more than once during continuous trading.

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.

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.

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.

Yes, orders can be cancelled or amended.

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.

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, 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.

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. 

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.

Only suspended listed securities that the exchange specifies.

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

1- A buyer and a seller agree off-market on the trade price, volume, and trade date.

2- Both parties inform their brokers to execute the trade on their behalf.

3- The broker enters the trade on behalf of the buyer and the seller.

4- Settled through Edaa between (T+0) and (T+5), according to what the Buyer and Seller agreed on.

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

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.

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

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

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.

Trades executed on Saudi Exchange will clear and settle through Edaa.

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

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

An investor should have an account in Edaa to trade in the Saudi Exchange.

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

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

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

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

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

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.

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.

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 workdays stipulated in the Saudi Labor Law. 

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

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.

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.

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.

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

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

Permitted: Limit orders, hidden orders, negotiated deals, fill-or-fill (FoK), and fill-and-kill (FaK)

Not permitted: market orders, session orders

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

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

The reference is set based on the previous day closing price or the listing price in the case of the first day of trading after listing.

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

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

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.

This change aims to improve the means of disclosure and provide the necessary tools to enable investors to reach 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 its 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 Exchange website.

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

The disclosure should be clear, correct and not misleading. It should fulfil 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.

To be a holder of a professional certificate of disclosure.

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

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.

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.

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

The order will behave according to the order validity.

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

• 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

No. The exchange suspends 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.

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

A dual listing is when a particular security is listed on two stock exchanges. Investors in both markets, as well as qualified international investors, can therefore participate in a dual listed IPO. 
Once listed, it will be possible for investors on both exchanges to trade the Company’s shares. The Offering price of the offered shares will be the same across both exchanges, after accounting for the prevailing exchange rate.
 

Investors can take advantage of greater liquidity in the shares and extended trading times, as well as exposure to securities outside of their home market.

A dual listed company will disclose material information in both markets through the formal communication channels of both exchanges, and in full compliance with the regulations applicable to listed companies in both countries. 
 

Sector classifications on exchanges are undertaken by independent third parties. As such, based on evaluation of the dual listed company by these third parties, the sector classification will be assigned, and may be different in both markets.  

RFQ allows investors to request a quote from a counterparty by digitizing the negotiated deals process.

The Request for Quote (RFQ) service can be used for all markets and securities.

It is available during the continuous trading session of the trading day between 10:00 – 15:00.

The initiator can request two quotes (buy or sell), to receive an executable price from the market for a specific security or just one quote (either buy or sell) with specified volumes.

Nevertheless, the investor initiating a Request for Quote request can also specify the desired price(s) for the sides selected with specified volumes.

In the RFQ service for Negotiated Deals, it can be sent to the whole market or selected Exchange Members in the market as specified by the initiator for a given quote.

An optional order condition that enables investors at order entry, to choose the order to be canceled in the case the Exchange Member system is disconnected from the trading engine. 

The Cancel on Disconnect flag cannot be amended for an order, but all other amendable fields (like price, quantity) will continue to be supported.

The share price on both exchanges will be the same at the time of listing, after accounting for the prevailing exchange rate. However, post listing, if the exchanges have different trading days and hours, trading characteristics (including trading volume and liquidity), trading rules, listing rules and investor bases, the trading price of the shares on both exchanges may not be the same at any given point in time. 

No, the 49% foreign ownership limitation does not apply to dual listed companies in Saudi Arabia.

No, the 10% QFI ownership threshold does not apply to dual listed companies in Saudi Arabia.

Suspension of shares from trading is dependent on existing regulations in each market. 

Shares are fully fungible and can be easily transferred between exchanges if investors are qualified to invest in both markets. Investors who wish to transfer their shares between the exchanges must hold a National Investor Number (“NIN”) and depository accounts with both exchanges. The movement of shares is restricted to the beneficial owners.

Yes, providing they meet the qualification requirements set out in the company’s Prospectus.

Yes, providing they meet the qualification requirements set out in the company’s Prospectus. 

Shares of dual listed companies will be traded in SAR on Saudi Exchange and in the local currency of the other exchange.
 

Dividends will be paid in SAR if the shares are held in the Saudi Exchange.

Cross listed companies are expected to conduct General Meetings using the Tadawulaty system for the shares listed in the Saudi Exchange

Short selling orders can be placed during all trading sessions in compliance with the Short Selling Regulations, published on the Saudi Exchange website.

Any short selling transaction is considered compliant with the uptick rule in all sessions (including opening auction, continuous trading, closing auction and trade-at-last) if at the time of submission (order entry), its price was at least one tick above the prevailing best bid in the order book of the relevant security.

When an Exchange Member submits a short selling order, it must be flagged as a short sell order in the Trading System.

Fluctuation limits do not apply to OTC.

The Global Industry Classification Standard (GICS) is based on a methodology that 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 structure has four levels: 11 main sectors, 25 industry groups, 74 industries, and 163 sub-industries.

S&P and MSCI determine and assign companies according to their respective principal business activity. Revenues and earnings are a significant factors in the criteria of companies classification.

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. 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. 

1. Pre-Opening Auction Session: Based on a request submitted to the Saudi Exchange, this session allows negotiated deals to be executed before the opening auction from 5:00 AM to 9:15 AM.
2. Market Closed Session: This session allows negotiated deals to be executed after market close during regular trading days. The session is available for negotiated deals execution for Debt Instruments and ETFs from 3:00 PM to 4:00 PM and for listed Equities, CEFs and REITs from 3:20 PM to 4:00 PM.
3. Post Market Closed Session: Based on a request submitted to the Saudi Exchange, this session allows negotiated deals to be executed after the market closed session from 4:00 PM up to 8:00 PM.

To enable Pre-Opening Auction Session and Post-Market Closed Session Lead Manager or Deal Coordinator must submit a formal request and adhere to the Saudi Exchange requirements.

Transactions executed in all additional sessions must comply with price daily limits and minimum size requirements.

• Enhanced Flexibility: Grants market participants extended time to efficiently transmit and execute orders.
• Global Best Practices Alignment:  Aligns the Saudi Exchange with internationally recognized best practices, reinforcing its position in global markets.
• Seamless facilitation of Transactions: Facilitates Accelerated Bookbuild and Secondary Public Offering transactions, enhancing liquidity and market efficiency.
• Improved Execution: Provides additional time to facilitates large transactions with minimal market disruption.

Yes, Market Participants still need comply to price and size requirements.

No it will not, except for Debt Instruments which has an impact on closing price.

Funds are pools of money allocated for a specific purpose or task.

The Saudi Exchange has four types of funds available to investors:
Exchange Traded Funds (ETFs)
Closed Ended Investment Traded Funds (CEFs)
Real Estate Investment Traded Funds (REITs)
Mutual Funds
 

ETFs are investment funds that track an index, and is divided into equal units that are traded on the exchange during official trading hours. ETFs enjoy advantages of both mutual funds and stocks at the same time.

1. Flexibility: ETFs are traded like any listed security during official trading hours.
2. Transparency: Information on the basket of securities, and Indicative Net Asset Value (iNAV) is readily available.
3. Liquidity: Market Makers provide bid and ask quotes to enhance liquidity.

ETF units can be traded like any other security through Brokers during trading hours. Also, units can be created and redeemed through the Market Maker or any other authorized party.

Market Makers provide bid and ask quotes for ETFs close to their Indicative Net Asset Value (iNAV).

Similar to investing in stocks, there are two ways to invest in ETFs.

One: During the IPO stage (primary market).

Two: Through the financial market (secondary market).

The expected gain similar to equities.

Authorized persons licensed by the Capital Market Authority (CMA) in Asset Management.

ETFs are not limited to stocks only, they may also include other instruments or commodities such as gold, silver and Sukuk.

No, it is subject to ETF available volume in the stock market.

Minimum ETF units that an investor can purchase over the exchange is one unit, whereas creation of ETF units would be as per the ETF Terms and Conditions.

The total trading commission of ETFs is the same as equities market, which is 15.5 bps on each trade with no minimum commission.

The trading price of ETFs units is subject to supply and demand. While the total Net Asset Value (NAV) of the unit represents the market value of assets consisting of the ETFs unit. Trading of ETFs units happens at a price close to the Net Asset Value (NAV).

The ETF performance is bound to the index that the ETF is tracking. Also, the pricing of the ETF units is based on the NAV not the price of its constituents.

Yes, the Fund Manager, as per Capital Market Authority (CMA) regulations, is obliged to provide the ETF Terms and conditions by an adequate period ahead of the ETF trading.

The ETF will be priced at NAV upon listing on the secondary market, then going forward ETF unit price will be determined by the market forces (supply and demand).

ETFs are managed completely and directly by the fund manager and subject to the Investment Fund Regulations issued by the Capital Market Authority (CMA), therefore no general assembly is arranged for these funds.

Yes, ETFs will be available to all categories of investors who are authorized to trade in the Exchange.

The risks of investing in an ETF are the same as those of investing in its underlying assets.

CEFs are investment funds available to the public and its units are traded on the market during trading hours similar to Real Estate Investment Traded Funds “REITs”. It aims to facilitate investments in different sectors and fields. Also, CEFs units represents ownership of the fund's assets. CEFs like other securities in the market, are subject to supervision by the Capital Market Authority and Tadawul, each according to their duties. Capital market regulations also oblige CEFs to have high levels of transparency and disclosure by publishing periodic reports for the fund on the website of the Saudi Stock Exchange (Tadawul).

• An investment opportunity: providing more liquidity to investors by buying and selling fund units during trading hours
• Ease of investment: CEFs are distinguished by clarity of their regulations and ease of trading their units - buying and selling - similar to shares and real estate investment traded funds listed on the Saudi Stock Exchange.
• Transparency requirements: The fund manager is obligated to submit periodic reports according to the activity of each fund, and they are displayed on Tadawul website like other reports of companies listed on the Saudi Stock Exchange.
• Assets Diversification: CEFs are characterized by the diversity of investment fields in one fund. Closed-ended traded investment are an asset or a group of investment assets in one fund, and they differ from Real Estate Investment Traded Funds (REITs) in the way of dividend distribution and ownership of assets and investments, as closed-ended traded funds are not allowed to invest in real estate investments.
                         

Investment Scopes:
There are many asset classes available for the fund manager to invest in, for example, but not limited to:
•             Financial Securities
•             Private funds
•             Private companies
•             Money markets
•             Multi-assets

Investment Restrictions:
•             CEFs may invest money and assets of the fund in private funds, provided that such investments do not exceed (25%) of the fund's net assets value. Also, CEFs feeder fund or fund of funds may not invest in private funds.
•             The Fund manager may not invest money and assets in real-estate investments
•             The fund manager may not invest more than (25%) of the fund's net assets value in a single illiquid asset.
•             The borrowing of the fund may not exceed (30%) of its net assets value.
 

•    The closing price for ETFs is determined by the midpoint price calculation methodology with the following rules:

• If there are no trades resulting in an update to the Last Traded Price (LTP) during the last 5 minutes of the continuous trading session prior to market closing time for ETFs, the midpoint closing price methodology is applied, based on executable quotes on both sides (bid / ask) available in the order book
• If there are no executable quotes on both sides (bid / ask) available in the order book at market closing time, Last Traded Price (LTP) is applied as closing price.
• If Last Traded Price (LTP) been not formed during the trading day, the previous days’ closing price is applied.
   

It is calculated based on the average best bid price and best ask price in the order book:

Mid - Point Calcualtion = (Best Bid + Best Ask) / 2

Just like investing in corporate stocks, there are two ways to invest in CEFs:

• First: In the public offering stage (the primary market)
• Second: Through the Stock Exchange (the secondary market) after the fund units are listed and traded on the Exchange.

Yes, as the fund manager abides by the conditions of the Capital Market Authority for investment funds, which include disclosure of the fund’s terms and conditions, and is committed to publish it in a sufficient period before the fund’s offering.

For more information about the risks of investing in CEFs, please review the terms and conditions of the CEF issued by the fund manager.

"Investing in CEFs and exiting from them is easier than traditional mutual funds.

CEFs are characterized by high transparency compared to other traditional mutual funds."

The total trading commission of CEFs is the same as equities, which is 15.5 bps on each trade with no minimum commission.

"Real Estate Investment Traded Funds, known as “REITs”, are real estate funds that are traded as units in the capital market.
REITs enable all types of investors to invest in income generating real estate assets which are developed and ready for use."

Moreover, REITs are required to distribute a portion of their net income to unit holders in cash at least once a year.

As with equities, there are two ways to invest in REITs:
Upon IPO, when Investment funds are listed by REITs fund managers (Primary Market).
After listing fund units in the market, where investors are able to buy fund units just like equities (Secondary Market).

The fund manager should appoint a licensed custodian entitled to retain fund assets and any related documents in accordance to a written contract. A fund manager should also be independent, as it is not allowed for the designated custodian to be the fund manager or assistant manager of the fund.

The designated custodian should separate all REIT’s assets from any personal assets or other clients’ assets. All records needed to support performances of contractual responsibilities should be maintained, and separately allocated by registering all securities and other assets of the investment fund under the name of the custodian of the same investment fund. REITs assets are registered under the name of a company affiliated to the custodian. Furthermore, REITs assets should be collectively owned by shareholders of this fund. A fund manager is obligated to assign a specialized real estate management company after obtaining all approvals from relevant government authorities. This is to manage real estates allocated for investment. This company should have necessary expertise in managing real estate, and should be responsible for executing property management activities including, but not limited to, property management, property maintenance, and leasing services and collection.

Liquidity (flexibility): REITs are listed on stock exchanges and traded throughout the trading times and dates.
Low initial cost for real estate investments.
Regular distribution of cash dividends based on clear, specific, and governing rules and regulations.
High transparency: REIT issuers must abide by stringent disclosure and continuous obligations requirements.

For more information regarding REITs risks, please read the REIT prospectus and terms & conditions (T&Cs).

REITs can own residential and commercial facilities ranging from small offices to big malls, warehouses, health facilities, hotels, and so on.

REITs can also invest locally, regionally, and globally in accordance with rules and regulations issued by the regulator (the Capital Market Authority). However, a REIT total value of the real estate assets outside the Kingdom of Saudi Arabia should not exceed 25%.

REITs are flexible to buy and sell, while REIFs are more complicated in terms of subscription and liquidation. REITs are highly transparent compared to REIFs.
A REIT is obligated to distribute 90% of its net income annually, while a REIF is not obligated to distribute any percentage of its net income.

The total trading commission of REITs is the same as equities market, which is 15.5 bps on each trade with no minimum commission.

A mutual fund is an investment fund managed by professional investment managers. Mutual funds pool money from many investors and then allocate the funds received into stocks, bonds, Sukuk and/or other assets, which can be used to generate a return for the investor over time.

Most mutual funds fall into one of four main categories;
money market funds
bond funds
stock funds
target date funds

The features and benefits of mutual funds include: 

• The potential to beat Inflation
• Expert Managers can look after your investment
• Convenience of having a managed investment
• Low Cost compared to other investment options
• Diversification of your financial portfolio
• Liquidity 
• Higher Return Potential than some other forms of investment
• Safety & Transparency of knowing what your investment is doing and where

ETF units can be traded like any other security through Brokers during trading hours. Also, units can be created and redeemed through the Market Maker or any other authorized party.

A stock market index is a way of measuring a stock market, or a subset of the market, that helps investors compare current price levels with past price levels. This can help them compare and contrast market performance from the past with the present, serving as a useful tool for investment decisions, discussion and analysis. 

WHAT INDICES ARE AVAILABLE ON THE SAUDI EXCHANGE?

• Tadawul All Shares Index (TASI)
• Parallel Market Capped Index (NOMUc)
• MSCI TADAWUL 30  (MT30)
• IBOXX TADAWUL SAR GOVERNMENT SUKUK & BONDS INDEX

The Tadawul All Share Index (TASI) tracks performance of all listed stocks on the Saudi Exchange main market.

The MSCI TADAWUL 30 Index (MT30) is a joint tradeable index co-developed with MSCI Inc. to serve as a basis for derivatives and exchange-traded financial products. The MSCI TADAWUL 30 Index (MT30) is designed to reflect the performance of approximately the 30 largest and most liquid stocks listed on the Saudi Exchange.

MSCI Inc. is a Global provider of equity, fixed income, hedge fund stock market indexes, and multi-asset portfolio analysis tools. For more than 40 years, MSCI’s research-based indexes and analytics have helped the world’s leading investors build and manage better portfolios. More than 14 Trillion USD in equity assets are estimated to be benchmarked to MSCI Indices, and more than 90 of the top 100 global investment managers are clients of MSCI.

Tradeable does not necessarily means that the index will be traded, it means that the index constituents are highly liquid, with a significant size available to be traded on the exchange.

The main users are international and domestic institutional investors, analysts, researchers, market commentators.

Primarily it is used to serve as the basis of Financial Product development such as index derivatives and exchange traded funds (ETFs) and/or as an alternative benchmark for the Saudi Equity market.

A capped index has a limit on the weight of any single security within that index. Thus, a capped index sets a maximum percentage on the relative weighting of a component that is determined by its market capitalization. The rationale behind a capped index is to prevent any single security from having a dominating influence on an index.

Capped Threshold:
The maximum level at which the weight of a constituent can be at an index review.

Capped indices are mainly used by fund managers; however, in addition to fund managers, capped indices could be of interest to all members of the investment community, researchers and academics.

No. NOMU capped index will be a new index and will be the headline index for NOMU market. However, this index will not replace the existing NOMU market index, which will be available earlier through Saudi Exchange website and e-Reference portal.

Capped indices at Saudi Exchange will follow the same free float market cap weighted calculation methodology, as is being used currently for all Saudi Exchange market and sector indices. As part of the index maintenance, capped indices will be rebalanced on a quarterly basis, aligned with the quarterly index maintenance cycle at Saudi Exchange. For more details, please refer to the methodology section under the Knowledge Center on Saudi Exchange website.

The Base date is March 21st 2019 and the Base Value is the closing index value for the same day.

Capped indices provide an alternate investment strategy and a benchmark for the fund managers by reducing the concentration risk of the portfolio, arising due to overweight index constituent(s). For the stock market in general, capped indices are known to reduce the index volatilities as the adverse influence of over-weight constituent(s) is contained.

Yes, backdated index history dating back to January 1, 2018 will be calculated and made available on the website.

No, TASI and other Market Indices will remain and continue to be available. The MSCI TADAWUL 30 Index (MT30) will complement these offerings and provide investors with more information on the most liquid stocks.

The MSCI TADAWUL 30 Index (MT30) will be published on Saudi Exchange’s website and made available via the services of Authorized Information Providers.

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

"The MSCI TADAWUL 30 Index (MT30) is derived from the MSCI Saudi Arabia IMI constituent’s universe (Parent Index).

This Parent index covers approximately 99% of the free float-adjusted market capitalization of the Saudi Equity market. In order to be eligible for MSCI TADAWUL 30 Index (MT30), liquidity and invisibility criteria below are applied on this universe: Frequency of Trading: The number of days a security traded during a period divided by the total number of market trading days within this period;

Traded Value Ratio: Annualized Traded Value of a security relative to its Free Float‐Adjusted Market Capitalization; Foreign Ownership Limit: Securities which do not allow foreign investments will not be eligible for MSCI TADAWUL 30 Index (MT30). Moreover, the proportion of shares still available to foreign investors relative to the maximum allowed will be considered in the index inclusion and in determining the weight of a security.

From the securities that passed the eligibility criteria above, top 30 in terms of size (Free Float market capitalization) are selected."

Yes, securities’ weight will be capped at 15% Capping Threshold to minimize dominance of large securities in the Index (to avoid concentration risk).

The MSCI TADAWUL 30 Index (MT30) will be rebalanced on quarterly basis, at the close of the last business day of May, August, November and February, coinciding with the Review of the MSCI Global Investable Market Indices.

The base date is November 26, 2013 and the base value is 1000.

The iBoxx Tadawul SAR Government Sukuk & Bond Index, was developed in collaboration with a world leader in critical information, analytics and solutions IHS Markit and is designed to reflect the performance of Saudi Arabian Riyal (SAR) denominated government bonds including Sukuk issued by Saudi Government. This index is a broad market benchmark.

The iBoxx Tadawul SAR Government Sukuk Index Series provides transparency to Saudi local currency and Saudi Government Sukuk market performance. It does not include Saudi Arabian Riyal (SAR) denominated government conventional bonds but includes solely Saudi Arabian Riyal (SAR) denominated government Sukuk.

IHS Markit is a global information provider and leader in the fixed income indices and data space. The company was selected by Saudi Exchange to become a strategic partner in Fixed Income Indices and data product development. iBoxx is IHS Markit’s fixed income indices brand, which is globally recognized as a leading brand in the fixed income indices space by the global fixed income investment community.

Sukuk/Bond Indices have been developed by Saudi Exchange only, not in collaboration with IHS Markit, as iBoxx Tadawul SAR Government Sukuk Index Series and iBoxx Tadawul SAR Government Sukuk & Bond Index.

Saudi Exchange Sukuk/Bond Indices are designed to reflect the performance and price movements of Saudi Arabia’s local currency denominated, all listed sukuk and bond market. Indices includes all Sukuk and Bonds listed on the Saudi Exchange. Indices are calculated using clean prices only, excluding accrued interest. Indices are calculated by Saudi Exchange in real time using traded prices obtained from Saudi Exchange’s order book.

Saudi Exchange currently calculate three types of Indices:
1. Sukuk/Bonds Market Index – includes all Saudi Exchange Listed Sukuk and Bonds. All bond types are eligible, including Fixed and Floating rate Sukuks and Bonds.
2. Government Sukuk/Bonds Index - includes all Saudi Exchange Listed Government Sukuk and Bonds. All bond types are eligible, including Fixed and Floating rate Sukuks and Bonds.
3. Corporate Sukuk/Bonds Index - includes all Saudi Exchange Listed Corporate Sukuk and Bonds. All bond types are eligible, including Fixed and Floating rate Sukuks and Bonds.

All Saudi Exchange Sukuk/Bond Indices are rebalanced on the same day of any corporate action, new issuance or delisting. There is no special treatment of the special intra-month events. The notional amount of the bond is updated on the same day there is a change.

If bonds from the same issuer are funded into one bond, then the notional amount will be adjusted for the ISIN, which remains listed and delisted for the ISIN which does not remain listed.

iBoxx Tadawul SAR Government Sukuk & Bond Index is designed to be a broad market benchmark and act as broad Saudi Government local currency fixed income market barometer.

iBoxx Tadawul SAR Government Sukuk Index Series are designed to be suitable for financial product development, such as ETFs etc. and is calculated using independent Fair Value Pricing method provided by IHS Markit Evaluated Bond Pricing Service (EVB). This method allows to track the performance of daily fair value Sukuk price movements on a daily basis even if Sukuk never been traded or quoted.

iBoxx Tadawul SAR Government Sukuk Index Series includes only Sovereign fixed coupon Sukuk debt issued by the Saudi Arabia government and is divided into maturity sub-indices, that helps to track performance of shorter- and longer-term Government Sukuks. Minimum Amount outstanding of eligible Sukuks must be at least SAR 100 million.

Indices are rebalanced on quarterly basis (February, May, August and November, last calendar day) as it helps to reduce transaction cost for fund managers who are following this index.

Indices are calculated daily End of Day only and have Clean Price ex accrued interest (CPI) and Total Return, accrued interest is included (TRI) Index levels.

For more details on the iBoxx Tadawul SAR Government Sukuk Index Series Calculation and Sukuk Selection Criteria, please refer to the Index Methodology.

And

For more details on the iBoxx Tadawul SAR Government Sukuk & Bond Index Calculation and Sukuk & Bond Selection Criteria, please refer to the Index Methodology.

Asset managers, ETF issuers, Hedge funds, Insurers / Pensions, Investment banks, Regulators, Central Banks, Research Houses, Academics.

"Benchmarking, ETF and other structured products issuance, Research, Risk Management.

For more information on use cases please go to Knowledge Center. [Link] "

"To view iBoxx Tadawul SAR Government Sukuk Index Series Daily End of Day Index Levels please refer to Index Info Page. [Link]

To view iBoxx Tadawul SAR Government Sukuk & Bond Index Daily End of Day Index Levels please refer to Index Info Page. [Link]"

"Only SAR-denominated fixed coupon Sovereign Sukuk debt issued by the Saudi Arabia government is eligible for this index. Minimum amount outstanding must be at least SAR 100 million.

For more details on the iBoxx Tadawul SAR Government Sukuk Index Series Calculation and Sukuk Selection Criteria, please refer to the Index Methodology. [Link] For more details on the iBoxx Tadawul SAR Government Sukuk & Bond Index Calculation and Sukuk & Bond Selection Criteria, please refer to the Index Methodology. [Link]"

iBoxx Tadawul SAR Government Sukuk Index - Base date is June 30, 2019 and the base value is 100.iBoxx Tadawul SAR Government Sukuk & Bond Index - Base date is January 31, 2020 and the base value of 100.

The Market Size Indices reflect the market's composition, with large companies accounting for 70% of the Free float market cap (Large cap), medium-sized companies for 20% (Mid Cap), and small companies for the remaining 10% (Small Cap). The Size Indices provides investors with benchmarks to broaden their investment strategies and to capitalize on specific market opportunities. The indices have a base date of 27th July 2023 with a base value of 5000. The indices follow the Saudi Exchange index methodology guidelines and the maximum weight for a single index constituent is 15%.

The Tadawul IPO Index focuses on companies listed on the Main Market within the past five years. It provides investors with a benchmark to evaluate the performance of their IPOs and provides investors with a unique opportunity to invest in new and rapidly growing companies. The Tadawul IPO Index have a base date of 27th July 2023 with a base value of 5000. The index follows the Saudi Exchange index methodology guidelines and the maximum weight for a single index constituent is 15%.

The Parallel Market Capped Index (NOMUc) is an index specifically for the Nomu Parallel Market.

Invest Wisely is a comprehensive initiative with investment workshop, comprehensive learning materials and access to a trading simulation platform, enabling participants to create a virtual portfolio with real-life trading experience on the Saudi Exchange.

You can easily register through the Practice page by entering your name, email, and mobile number.

No. 

Once the registering process is completed, attendance will be confirmed. Click here to access the registration form.

The money used in The Simulator is virtual, which allows users to have a real-life experience of trading on the stock market, without experiencing financial risk.

Yes, 18 years and above.

To find the available workshops please visit the Engage Page.

You can register through our Engage page.

Yes, you can download our Trading Simulator mobile application available on IOS and Android. 

A Market Maker is an entity (Exchange Member) which actively provides continuous two-way quotes (buy/sell orders) on a listed security during the Market Open session for the purpose of ensuring the availability of liquidity for a relevant listed security, in accordance with the provisions of the Market Making Regulations, Procedures and the Market Making Agreement.

Market Makers are subject to obligations set by the Saudi Exchange (“The Exchange”) and compliance with these obligations is monitored by the Exchange accordingly. The Exchange provides incentives, as applicable, provided the Market Maker meets the pre-defined obligations as per the Market Making Agreement between the Market Maker (Exchange Member) and the Saudi Exchange.

Market Makers are obligated to provide liquidity on a specific security by committing to providing continuous quotes throughout the Market Open session within obligations set by the Exchange as per the published obligations on the Exchange’s website and Market Making Agreement. These obligations include:

• Maximum spreads
• Minimum bid/ask size
• Presence time in compliance
• Minimum daily traded value (where applicable)

The Equity Markets Market Maker obligations are based on the defined obligations of the security’s liquidity group, while the Derivatives Market Maker obligations are based on product type. 

Market Makers activities does not intend to influence market prices or controlling market volatility.
For more details, please refer to Market Making regulations and procedures.

Equity Markets securities are classified into 5 liquidity Groups based on each listed liquidity profile:

• Group A: Very high liquidity
• Group B: High liquidity
• Group C: Medium liquidity
• Group D: Low liquidity 
• Group E: Very low liquidity

Classification is based on historical average spread and size reviewed by the Exchange on a semi-annual basis and published on (1 January - 1 July). The obligations may be amended from time to time taking into consideration market dynamics in line with the Market Making Regulations and Procedures.

Market Makers must be a Capital Market Institution (CMI) and are required to be Members of the Exchange. An Exchange Member may act as principal (on their own account) or agent (on behalf of a local or international client) and will be incentivized daily with discounted trading commissions provided the Market Maker complies with the daily obligations set by the Exchange. 

The Market Making Agreement is always between the Exchange and the local Exchange Member.

For Equity Markets Market Makers, incentives are correlated to liquidity groups and are structured in effort to enhance overall market liquidity, with higher incentives for securities falling in the lower liquidity groups. Securities with higher liquidity profiles will have more stringent obligations, where securities with lower liquidity profiles will have more relaxed obligations. The incentives are provided on a daily basis and Market Makers are only eligible for incentives if the obligations are met . According to the Market Making Rules & Regulations, and Market Making agreement.

For Derivatives Market Makers, the incentive is fixed for all Market Makers and they may vary from one derivatives product to another.

For Fixed Income Market Makers, the incentive is fixed for all Market Makers.

For Equities all listed securities for Main Market and Nomu – Parallel Market including (Equities, REITs and CEFs) are eligible for Market Making..

For Derivatives market making, futures and options contracts are eligible.

For Fixed Income, All Corporate and Government Sukuk and Bonds listed on the Saudi Exchange are eligible for market making.

- Single stock obligations and incentives allow Market Makers to market make on 1 security.
- Single Stock+1 obligations and incentives allow Market Makers to choose two securities, provided one of the securities is classified in Group D (low liquidity) or below, where the incentives will be provided only if obligations on both securities are met

For newly listed securities, the Exchange will review and publish the obligations and incentives based on the security’s liquidity in the first 15 days of listing, where the security will be classified into one of the liquidity groups accordingly.

Yes, one of the purposes determined by Edaa is enabling Market Makers to enter into SBL transactions as borrowers to facilitate market making activities in accordance with the relevant Exchange Rules and Procedures.

Fixed Income Market securities obligations and incentives will apply to all Corporate and Government Sukuk and Bonds listed on the Saudi Exchange.

A QFI can open a Depository Center account through the Custody member after completing the following requirements:

• QFI details form.
• A copy of the certificate of incorporation or commercial registration or an equivalent document.
• Disclosure of the QFI’s investments in listed companies.
• The identification of QFI and non-resident foreign investors shall be through Custody Members.

The Exchange member should send the requirements to the Exchange in both printed and electronic forms. The electronic copies should be sent to the following email address: (INSERT)

To transfer holdings under a swap account to a QFI or QFI client, the following requirements should be met:

CMA’s approval.

Filling out the Securities Depository Center transfer form.

A certified copy of the certificate of incorporation, and the commercial register or an equivalent document.

Investment limitations set forth in the articles of association or by-laws of the listed companies or any instructions issued by the supervisory or regulatory authorities to which these companies are subject, will be available under each issuer’s profile page; under the label “investment limits”.

Foreign ownership information will be available on Saudi Exchange website, and it will be updated on a daily basis after the market closes.

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

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.

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.

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

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

The T+2 settlement cycle was introduced on (DATE) to align the Saudi Capital market with leading global settlement practices, which will provide new listing opportunities for the Saudi market among other global market indexes. It increases the levels of asset safety for investors by providing enough time to verify transactions and deal with errors should they occur

When a company issues stock, it is selling partial ownership in exchange for cash. However, when an entity issues Sukuk or Bonds, it is borrowing cash with an agreement/promise to repay the borrowed amount at maturity.

Stocks are issued by companies only, whereas Sukuk and Bonds are issued by both companies and governmental entities.

Sukuk and Bond prices are considered less volatile compared to equities, while the return on equities could potentially be higher than that of Sukuk and bonds. Sukuk and Bonds commonly promise fixed returns as well as the repayment of the principal, while stocks does not commonly promise fixed returns, rather, it depends on the company’s performance.

Sukuk and Bond holders have the priority of repayment in the event of company liquidation or bankruptcy.

Sukuk and Bonds are financial instruments issued by Governments or Corporations to raise money from investors for a period of time.

Commonly, over this period, Sukuk and bonds distribute periodic coupon payments (either at a fixed or floating rate). At the end of this period, known as maturity, issuers pay back the money raised from investors, known as the principal.

A sukuk is an Islamic financial certificate, similar to a bond, that complies with Islamic Sharia law. Since the traditional interest-paying bond structure is not permissible under Sharia, the issuer of a sukuk essentially sells an investor group a certificate, and then uses the proceeds to purchase an asset that the investor group has direct partial ownership interest in. The issuer must also make a contractual promise to buy back the bond at a future date at par value.

Bonds are fixed income instruments that provide an investor with returns, paid by the issuer, for an agreed period of time, in effect acting like a loan with repayments. Bonds are used by a range of businesses and governments to provide capital for their activities.

When a company issues stock, it is selling partial ownership in exchange for cash. However, when an entity issues Sukuk or Bonds, it is borrowing cash with an agreement/promise to repay the borrowed amount at maturity.
Stocks are issued by companies only, whereas Sukuk and Bonds are issued by both companies and governmental entities.
Sukuk and Bond prices are considered less volatile compared to equities, while the return on equities could potentially be higher than that of Sukuk and bonds.
Sukuk and Bonds commonly promise fixed returns as well as the repayment of the principal, while stocks does not commonly promise fixed returns, rather, it depends on the company’s performance.
Sukuk and Bond holders have the priority of repayment in the event of company liquidation or bankruptcy.

Fixed rate coupons are characterized by their fixed coupon payment, which does not change over time.

Sukuk are Sharia-compliant financial certificates through which investors gain partial ownership on an issuer’s assets until maturity. While Bonds are financial certificates through which investors lend money to the issuer, indicating an obligation for repayment at maturity.

Bondholders receive regular interest payments, while Sukuk holders receive a share of the profit generated by the underlying asset.

By issuers: Raising capital to fund operations or development plans.

By investors: An investment opportunity to receive periodic coupon payments and potential price uplift. A diversification strategy for investors as their portfolios include Sukuk and Bonds along with other securities.

Sukuk and Bonds can be traded like any other security through Brokers during trading hours. They can also trade Over the Counter (OTC), which means this occurs outside the formal exchange environment and without overview by the Regulator.

Sukuk can provide returns in a manner similar to returns, whilst remaining in compliance with Sharia law. The International market for Sukuk has grown considerably in recent years and they are now a widely available and popularly traded financial instrument. 

•    The closing price for Debt Instruments is determined by the midpoint price calculation methodology with the following rules:

• If there are no trades resulting in an update to the Last Traded Price (LTP) during the trading session prior to market closing time for Debt Instruments, the midpoint closing price methodology is applied, based on executable quotes on both sides (bid / ask) available in the order book
• If there are no executable quotes on both sides (bid / ask) available in the order book during the trading day, the previous days’ closing price is applied.
   

It is calculated based on the average best bid price and best ask price in the order book:

Mid - Point Calculation = (Best Bid + Best Ask) / 2

Yes, static limit (+/- 10%) is applied on Debt Instruments.

A Volatility Auction is triggered intraday whenever a trade can potentially match at the upper end or lower end of the static limit. At the end of the Volatility Auction, a new Static Reference Price is set, based on the price resulting from the Volatility Auction (TOP) where trades are matched. If there is no TOP, the Static Reference Price reverts back to the Last Traded Price (LTP).
 

Yes, market orders are available for Debt Market Instruments similar to equities.