The Saudi Stock Exchange published draft rules for short-selling and the borrowing and lending of securities that would introduce settlement of trades within two working days of the execution. (T+2), according to a Reuters report.
The transition to T+2 is expected to take place during the second quarter of 2017. In a unique situation, the exchange is actually moving in the opposite direction of most major exchanges, as the trading venue currently requires trades to be settled on the same day (T+0).
The decision to expand the settlement cycle will help to attract foreign investors, who have found it difficult to trade on the exchange due to the large amounts of capital required during trading, according to the report.
"Introducing the T+2 settlement cycle aims to align the Saudi stock market with leading global settlement practices, and to increase levels of asset safety for investors," the exchange said in a statement.
The exchange asked for public comments on the draft rules by Feb. 8.
While at Sibos Toronto, James shares some interviews covering topics on blockchain, fintechs and cybersecurity.Subscribe to Weekly Wrap emails