CMA approves securities central counterparties regulations
Saudi Arabia’s Capital Market Authority (CMA) approved on Wednesday the securities central counterparties regulations and amended the glossary of terms used in the regulations, which will come into effect as of the date of publication.
The newly approved regulations aim to regulate securities clearing activities in the Kingdom and specify the requirements for obtaining an authorisation to carry out such activities, according to CMA’s statement on Wednesday.
This will also guarantee the settlement and fulfillment of obligations of transactions parties, and strengthen and enhance the market’s infrastructure, CMA said.
The market regulator set the authorization requirements for applicants as Central Counterparty Clearing Houses (CCP) established in the Kingdom as follows:
1) It is required to have liquid net assets higher than the maximum of (a) SAR 100 million; operating expenses forecast in 6 months, excluding depreciation and amortization expenses; (C) any other amount determined by the CMA;
2) It should be fit and proper and has adequate expertise and resources to carry out securities clearing services in the Kingdom;
3) It has managerial expertise, financial systems, risk management policies and systems, technological resources, policies, procedures, and operational systems that are sufficient to fulfil its business and regulatory obligations;
4) Its governing body and employees are required to have the necessary qualifications, skills, experience and integrity;
5) The identities of the shareholders that have direct or indirect holdings of 5% or more of the capital whether they are natural or legal persons;
6) It will comply, upon authorization, with the principles for financial market infrastructure including, without limitation, the disclosure framework and assessment methodology;
7) The time span for the Central Counterparty Clearing House (CCP) recovery in accordance with the provisions of Article 20 of these regulations;
8) The applicant will also comply with any requirements to be determined by the CMA from time to time.