Saudi Arabia’s Edaa partners with Euroclear
28 October 2021 Saudi Arabia
Image: Anton Balazh
Saudi Arabia’s Securities Depository Center Company (Edaa) and Euroclear have partnered to launch a Euro-clearable link, enabling international investors access to sukuk and bond markets listed on the Saudi Exchange — the largest in the Gulf Cooperation Council (GCC).
Through the initiative, international investors will be able to settle domestically issued bonds via Euroclear Bank’s direct account in Edaa using their existing Euroclear Bank accounts.
Euroclear Bank’s eligible international investors will benefit from a suite of services including internal settlement and safe-keeping of Saudi government and quasi-government bonds listed on the Saudi Exchange, without the need to apply for a qualified foreign intermediary status.
Eligible investors will also be able to use such securities as collateral for financing activities, including repo and pledging via Euroclear’s Collateral Highway plaform.
The launch of the link, which aims to achieve greater interoperability within the market, follows the recent announcement of the Saudi Arabia inclusion to the FTSE Russell Emerging Markets Government Bond Index, as well as the Saudi Tadawul Group’s local market infrastructure enhancements which include the initiation of a framework for both primary and secondary market delivery vs payment settlement.
The Saudi Exchange is one of the largest stock exchanges globally and amongst the top three largest emerging market exchanges with a market capitalisation of more than US $2.5 trillion.
Raed Alhumaid, CEO of Edaa, says: “We are excited to partner with Euroclear, an international central securities depository, which allows us to expand the international reach to the Saudi capital market, and in turn enhances the diversity of the investor base in the market and increases its efficiency [...] as we aim to amplify our reach by creating more channels for international investors to efficiently access the Sukuk and Bonds market.”
Lieve Mostrey, CEO of Euroclear Group, comments: “We are extremely pleased to be able to bring the scale and robustness of our infrastructure to the Saudi capital market. This achievement is the result of a lot of hard work and diligent focus by all involved as we continue to expand our global service for our clients.”
Through the initiative, international investors will be able to settle domestically issued bonds via Euroclear Bank’s direct account in Edaa using their existing Euroclear Bank accounts.
Euroclear Bank’s eligible international investors will benefit from a suite of services including internal settlement and safe-keeping of Saudi government and quasi-government bonds listed on the Saudi Exchange, without the need to apply for a qualified foreign intermediary status.
Eligible investors will also be able to use such securities as collateral for financing activities, including repo and pledging via Euroclear’s Collateral Highway plaform.
The launch of the link, which aims to achieve greater interoperability within the market, follows the recent announcement of the Saudi Arabia inclusion to the FTSE Russell Emerging Markets Government Bond Index, as well as the Saudi Tadawul Group’s local market infrastructure enhancements which include the initiation of a framework for both primary and secondary market delivery vs payment settlement.
The Saudi Exchange is one of the largest stock exchanges globally and amongst the top three largest emerging market exchanges with a market capitalisation of more than US $2.5 trillion.
Raed Alhumaid, CEO of Edaa, says: “We are excited to partner with Euroclear, an international central securities depository, which allows us to expand the international reach to the Saudi capital market, and in turn enhances the diversity of the investor base in the market and increases its efficiency [...] as we aim to amplify our reach by creating more channels for international investors to efficiently access the Sukuk and Bonds market.”
Lieve Mostrey, CEO of Euroclear Group, comments: “We are extremely pleased to be able to bring the scale and robustness of our infrastructure to the Saudi capital market. This achievement is the result of a lot of hard work and diligent focus by all involved as we continue to expand our global service for our clients.”
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