CMA starts receiving bids for commodity exchange activities

Logo of Capital Market Authority (CMA)

The Capital Market Authority (CMA) started today, July 1, receiving applications for authorization to carry out commodity exchange activities in the Saudi market.

In a statement, the regulator added that applications will be received for a period of 123 days, until Oct. 31, 2026.

The CMA says the move is set to strengthen the capital market infrastructure, increase the range of financial instruments in the Saudi capital market, and diversify its products. It intends to grant one license to operate as a commodity exchange in the Kingdom during the current application period, in line with the structure of the capital market and with consideration for investor confidence and the stability of licensed markets.

During this application window, the focus will be on the activity for trading in a secondary market for commodity and metals derivatives contracts, in a manner that enhances its attractiveness, benefits market participants, and strengthens its position in global capital markets.

The announcement of the commencement of the application submission period follows the revised Capital Market Law dated Sept. 18, 2019. This is in addition to the CMA's earlier announcement regarding the approval of the Securities Exchanges and Depository Centers Regulations, published on July 18, 2022, which indicated that CMA would subsequently determine the periods for submitting authorization applications for securities exchanges and depository centers, as well as the mechanism for submitting them.

The market regulator called on all parties interested in carrying out commodity exchange activities in the Kingdom, to submit an application for authorization, and that the application specifically pertains to carrying out commodity exchange activities in accordance with the authorization requirements set forth in the Securities Exchanges and Depository Centers Regulations, using the designated application form.

The Ministry of Industry and Mineral Resources earlier announced it was considering with other parties the establishment of a Saudi exchange and index for minerals and mining. (link).