Saudi stock exchange launches derivatives market and clearinghouse with Nasdaq

The new derivatives market and clearinghouse from the Saudi exchange group Tadawul will run on market technology from Nasdaq.

Saudi exchange operator Tadawul has launched its first derivatives market and a clearinghouse, which are operating on Nasdaq’s markets technology.

The launch aims to provide regional and international investors with hedging tools to manage risk and expands exposure to the Saudi market.

Tadawul confirmed its first exchange-traded derivatives product will be the MT30 index futures based on the MSCI Tadawul 30 Index (MT30), with central counterparty clearing via the new clearinghouse, known as Muqassa. The exchange added it plans to roll out further derivatives such as single stock futures, single stock options, and index options.

“Tadawul has been resolute in its ambitions to transform its market infrastructure in order to have world-class technology that meets and exceeds today’s demands and the new challenges of tomorrow,” said executive vice president and head of market technology at Nasdaq, Lars Ottersgård.

“We are pleased to celebrate the launch of Tadawul’s new derivatives market and CCP, as well as further extending our technology relationship. Nasdaq is fully committed to supporting Tadawul through this important transformation.”

The launch of the derivatives market in Saudi Arabia is one of the key initiatives for the Financial Sector Development Program (FSDP) under the Saudi Vision 2030. Tadawul added it also marks a step in introducing market products and creates a trading environment to attract international and local traders and hedgers.  

“This is a significant step in introducing sophisticated market products and creating a trading environment that is attractive to local as well as international investors,” stated Tadawul chief executive, Khalid Alhussan. “The launch of derivatives market will provide investors with hedging tools to more effectively manage risk and gives expanded opportunities to gain exposure to the Saudi capital market, the largest and most liquid market in the region.”