Tadawul initiates new measures for market efficiency
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Tadawul initiates new measures for market efficiency 16 January 2018Riyadh Reporter: Jenna Lomax
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The Saudi Stock Exchange Tadawul has implemented new measures in an effort to raise market efficiency, boost investor access, security and liquidity.
As part of the new measures, Tadawul has implemented a market making programme based on global best practices to enhance liquidity and facilitate better price formation.
Changes to methods for determining opening and closing prices and the introduction of the Market Making programme are to be implemented by Q2 2018.
Tadawul will also introduce a new model allowing asset managers to aggregate the orders of managed assets to ensure best execution and fair allocation for funds and clients, which expected to be introduced on 21 January.
The new measures come after Tadawul signed an agreement for Nasdaq to replace its post-trade technology infrastructure in December.
Nasdaq’s technology replaced Tadawul’s registry, depository, clearing and settlement solution, which was implemented in 2001.
Nasdaq’s technology will support the existing trading and market surveillance technology.
According to Tadawul, the initiation of Nasdaq technology, as well as these new changes, will bring further growth to the market, and will reduce risk in the post-trade area, in compliance with international standards.
Commenting on Tadawul’s new measures, Khalid Abdullah Al Hussan, CEO of Tadawul, said: "The cumulative impact of these measures will be a more efficient, liquid and secure market for investors and intermediaries that is further aligned to international best practices."
He added: “This next generation of market improvements builds on and augments the reforms already successfully implemented by Tadawul in 2017. These measures and reforms are creating a more attractive investment climate for domestic and international investors alike and have attracted more than 100 major financial institutions to open accounts in the Kingdom."
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