The Saudi Stock Exchange, or Tadawul, is to reduce its trading fees in order to encourage more secondary trading of debt and greater involvement from retail and institutional investors.
In a joint statement with the Capital Markets Authority (CMA) and the Debt Management Office (DMO), Tadawul announced that it would reduce its trading commissions along with fees for new offerings, annual listing fees and annual registration charges for issuers.
For investors, In addition, the CMA said it would waive trading commissions on all types of investors with the exception of special cases.
Tadawul chief executive Khalid Al-Hussan said that the changes are designed to encourage issuers to list more Saudi currency sukuk and bonds in the public debt market and to increase trading activity and market liquidity.
“Increased liquidity of the debt market will, in turn, contribute to the issuance of more diversified debt instruments and introduction of new asset classes for investors,” he said.
The decision to cut fees and commissions follows reforms to Saudi Arabia’s Islamic bonds, or sukuk market, announced in March which are designed to open up the market to retail investors as well as a greater number of investment funds. These reforms include enabling government sukuk to be sold in $267 (SR1000) units, ten times lower than the former limit.
©2019 funds global mena