Saudi Exchange launches market-making framework for equity and derivatives markets

The Saudi Exchange (Tadawul) has announced the launch of a market-making framework for its equity and derivatives markets, to ensure the availability of liquidity and increase price formation efficiency in the Saudi capital market.

Under the market-making regulations, any person that wishes to conduct market-making activities on a listed security must be an exchange member or a derivatives exchange member and may act in the capacity of principal on their own account or as an agent on behalf of a client.

The market maker continuously enters buying and selling orders for the relevant listed security during the market open session to ensure the availability of liquidity for that listed security in accordance with the market-making regulations.

“Introducing market-making to the Saudi Exchange’s equity and derivatives markets will ensure the availability of liquidity, in line with global standards and practices. Saudi Exchange’s successful implementation of a number of far-ranging enhancements over the past few years, including most recently a bundle of enhancements to the post-trade infrastructure, has been crucial to supporting our growth as we seek to advance the Saudi capital market. This step brings us closer to further enhancing the Saudi Exchange’s attractiveness as an investment destination to investors and issuers, regionally and internationally,” said Mohammed Al Rumaih, CEO of Saudi Exchange.

Saudi Exchange will publish on its website a list of market makers and the securities on which they are performing this activity, and it will provide incentives after the obligations are met.