CMA cancels share in sukuk, bonds trading commission

Logo of Capital Market Authority (CMA)

The Capital Market Authority (CMA) announced the cancelation of its share in sukuk and bonds trading commission starting from May 2023.

This step comes as part of the efforts to reduce costs on market participants in a way that enhances liquidity, increases competitiveness in the local market and expands domestic investors' base in government debt issues.

This shall contribute to achieve the strategic objectives of Vision 2030 related to developing a diversified and effective financial sector to support the development of economy and create an advanced capital market, the market regulator said in a statement.

By this decision, the CMA affirms its commitment to stimulate activities of debt instruments secondary market, considering such commitments as long-term commitments, without exceptions. This comes in line with authority’s strategic objective relevant to developing sukuk and debt instruments market to boost its attractiveness to issuers and investors.

CMA endeavors this resolution will contribute to stimulating issuers to list local currency-denominated sukuk and bonds in the Saudi debt instruments market and encouraging investors to trade such instruments in a way that shall help to deepen the market and raise its liquidity.

This is along with diversifying finance choices before public and private sectors by creating a new asset class available for all investors' segments. 

The decision comes in line with exemptions and changes of the fees in return for debt instrument trades during the last 14 years.

The authority also noted that sukuk and debt instruments market witnessed a number of developments in the past years, including reducing the face value of government sukuk from SAR 1 million to SAR 1,000 as a gesture to increase trading rates in the market.

This is in addition to linking Clearstream with Securities Depository Center Co. (Edaa) internationally and availing debt instruments trades for all foreign investors.