Latest news with #SaudiDepositaryReceipts
Zawya
6 days ago
- Business
- Zawya
Saudi CMA approves regulatory framework for the offering of SDRs
The Saudi Stock Exchange (Tadawul) has launched new regulations that will enable investors to have easier access to a broader range of foreign-listed businesses. The local bourse confirmed on Monday that the Capital Market Authority (CMA) has approved the regulatory framework for the offering of Saudi Depositary Receipts (SDR), a move that is expected to deepen the Saudi market and diversify investment opportunities. The framework permits the issuance and trading of SDRs, which represent shares of companies that are already listed on stock exchanges outside Saudi Arabia. Companies who wish to trade SDRs will now follow the requirements for registering and offering shares currently in place under the Rules on the Offer of Securities and Continuing Obligations. Issuers will also be subject to the same continuing obligations applicable to a foreign company that lists its shares on the Main Market under the Listing Rules, subject to certain exceptions. The regulatory framework, which underwent a public consultation, builds upon the CMA's move in 2020 that allowed companies listed on the local capital market to issue certificates of deposit outside Saudi Arabia in exchange for their shares traded in the kingdom's capital market. "This move aims to strengthen the pillars of Saudi Vision 2030, which seeks to make the Saudi capital market attractive to both local and foreign investors," the bourse said. "Consequently, it is now allowed to offer depositary receipts to foreign companies in exchange for the issued shares in a foreign market." (Writing by Cleofe Maceda; editing by Seban Scaria)
Arab News
07-07-2025
- Business
- Arab News
Saudi Exchange unveils new instrument to trade global shares locally
RIYADH: Saudi Arabia has introduced a new financial instrument that gives investors in the Kingdom direct access to shares of foreign companies listed on global markets. The Saudi Exchange on July 7 launched its first Saudi Depositary Receipts, allowing international equities to be traded locally in Saudi riyals. The move marks the debut of depositary receipts in the Kingdom's financial market and is seen as a strategic leap toward reinforcing Riyadh's position as a global financial center, in line with the Financial Sector Development Program and broader Vision 2030 ambitions. In a release, Tadawul stated: 'SDRs are highly liquid and flexible, enabling issuers to transfer securities between the Saudi financial market and foreign markets by converting the SDRs into shares in the foreign market, thus enabling the company's shares to be traded on two different financial markets.' It described the launch as 'a pivotal step toward consolidating the Kingdom's position as a global financial center.' This development is not merely a technical upgrade; it reflects a broader strategic effort to modernize and globalize Saudi Arabia's capital markets. Since the launch of Tadawul Group's post-initial public offering transformation, the Kingdom has introduced a series of reforms aimed at enhancing market sophistication and accessibility. These include inclusion in global emerging market indices such as MSCI, FTSE, and S&P Dow Jones; the rollout of derivatives trading; the simplification of Qualified Foreign Investor frameworks; and the acceleration of sector-diverse IPO pipelines. The introduction of SDRs builds on this momentum by bridging local and international investment landscapes — effectively bringing Wall Street- or London-listed equities to Riyadh's trading screens. What are SDRs and why do they matter? A depositary receipt is a financial instrument that represents shares in a foreign company but is traded on a local exchange in the domestic currency. In the case of SDRs, this means investors in the Kingdom can gain exposure to foreign firms — such as global technology giants, industrial leaders, or energy companies — without needing to open a brokerage account abroad. Unlike traditional cross-border investing, SDRs enable seamless trading, clearing, and settlement through Tadawul, all denominated in Saudi riyals. This makes it easier for local investors to access global markets. They can buy international shares through a familiar domestic platform and trade using local brokers. It also helps them diversify their portfolios without dealing with foreign accounts. Most importantly, they remain under the protection of Saudi Arabia's legal and regulatory framework.
