Clearing center regulations to be issued in Q4 2019: CMA official

Establishing a clearing center in Saudi Arabia will boost capital market protection and pave the way for introducing new products, particularly financial derivatives, Bader Balghonaim, the Capital Market Authority’s Deputy, Legal Affairs & Enforcement told Argaam on the sidelines of the Euromoney Conference 2019.

“The clearing center regulations will be issued in Q4 2019,” said Balghonaim.

“We contributed to the Saudi Vision 2030 by the Financial Sector Development Program and we found it necessary to implement some amendments on the capital market law, Balghonaim added.

The amendments will also help develop mechanisms for compensating affected investors in the capital market, and facilitate the process of receiving due compensations and fast track related procedures.

In addition, the CMA was granted some additional authorities to address violations and enhance deterrence.

“Penalties will be aggravated to guarantee full compliance with the market’s regulations,” Balghonaim noted.

The CMA was authorized yesterday to license other entities to provide activities of exchanges, depositories or clearing houses, Argaam reported.

The clearing house is a financial institution formed to facilitate the exchange of payments, securities or derivatives transactions as well as to reduce the risk of a member firm failing to honor its trade settlement obligations.