Saudi Arabia’s stock exchange, Tadawul, has widened access to short-selling and stock-lending, while tightening other rules related to the activities.
As of March 25, all eligible investors in the Saudi market are permitted to sell any stock short, Tadawul said in a statement on the bourse website.
However, new rules stipulate that the short ratio to average daily traded volume of any security should not exceed 10 days and total net short positions must not exceed 10 percent of the free float.
Refinements have also been made to collateral rules for those lending and borrowing securities.
The changes were made to develop a regulatory environment consistent with the international best practices and to provide a “motivating and competitive atmosphere with high reliability,” Tadawul said in the statement.
Tadawul became the first Gulf bourse to allow short selling for institutional investors in April 2017 as it introduced a number of changes to court international investors and appeal to index providers such as MSCI Inc. Abu Dhabi and Dubai followed in October and December of that year, respectively.
MSCI upgraded Saudi Arabia from a “standalone market” to an “emerging market” in June 2018 and became a full member of the MSCI Emerging Markets Index in August 2019 with a weighting of 2.8 percent.
Tadawul and the Securities Depository Center, Edaa, launched a consultation on the latest changes in February, 2020.
As of March 25, all eligible investors in the Saudi market are permitted to sell any stock short, Tadawul said in a statement on the bourse website.
However, new rules stipulate that the short ratio to average daily traded volume of any security should not exceed 10 days and total net short positions must not exceed 10 percent of the free float.
Refinements have also been made to collateral rules for those lending and borrowing securities.
The changes were made to develop a regulatory environment consistent with the international best practices and to provide a “motivating and competitive atmosphere with high reliability,” Tadawul said in the statement.
Tadawul became the first Gulf bourse to allow short selling for institutional investors in April 2017 as it introduced a number of changes to court international investors and appeal to index providers such as MSCI Inc. Abu Dhabi and Dubai followed in October and December of that year, respectively.
MSCI upgraded Saudi Arabia from a “standalone market” to an “emerging market” in June 2018 and became a full member of the MSCI Emerging Markets Index in August 2019 with a weighting of 2.8 percent.
Tadawul and the Securities Depository Center, Edaa, launched a consultation on the latest changes in February, 2020.
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