Tadawul to launch exchange-traded derivatives on August 30

In a statement, Tadawul said that the first exchange-traded derivatives product is an index futures contract, the Saudi Futures 30 (SF30). The contract is based on the MSCI Tadawul 30 Index, also known as MT30.

In a statement, Tadawul said that the launch of the derivatives market is aimed at helping the Saudi capital market grow by creating new opportunities for investors, as well as providing them with hedging tools to manage risk.

“Today, we can proudly say that our capital markets is not only the largest in the region, but also developing faster than most exchanges in terms of both the products and the services we offer,” said Tadawul CEO Khalid Al Hussain.

“The launch of the Derivatives Market in Saudi Arabia as one of the Financial Sector Development Program (FSDP) key initiatives under the Saudi Vision 2030 is a significant step in introducing sophisticated market products and creating a trading environment attractive to local as well as international hedgers and traders” Al Hussan added.

Securities Clearing Center

As part of the announcement, the Securities Clearing Centre Company – also known as Muqassa – announced that it will commence operations on August 30.

The centre, which was formally established in 2018 and licensed earlier this year, aims to improve post-trade infrastructure and contribute to reducing counterparty risk.

The centre will start with the MT30, with other markets to follow later.

“The activation of an independent clearinghouse is part of the financial sector development programme in line with Vision 2030 goals to develop a diversified and effective financial sector in the kingdom,” said Wael Abdullah Al Hazzani, CEO of Muqassa.

“We believe that Muqasssa will enhance the current financial market infrastructure by applying advanced risk management practices and transparent default management processes,” he added.