Saudi Arabia Deepens Market Reform With Clearstream Post-Trade Pact
Clearstream Enters Saudi Post-Trade Infrastructure
Investor Takeaway
A Reform Program Years in the Making
The MoU builds on reforms dating back to 2017, when the Capital Market Authority introduced a two-day settlement cycle and allowed securities lending and short-tradeing. Those changes paved the way for Saudi equities to join the MSCI Emerging Markets Index in 2019, drawing billions in passive inflows and pushing the market toward international norms.
From 2018 to 2020, the Tadawul Group—Edaa’s parent—constructed the post-trade backbone through Muqassa, a central counterparty designed to reduce settlement risk. In 2021, Clearstream opened a direct link with Edaa that gave its clients access to Saudi securities. The new agreement extends that relationship beyond access into service integration.
How the System Will Work
Edaa currently handles custody, registration and corporate actions for Saudi securities. Under the partnership, SCMS will automate the allocation and monitoring of collateral across counterparties, providing daily mark-to-market valuation and eligibility checks. Local banks and brokers will be able to pledge government sukuk, corporate bonds or equities as collateral through an agent-managed process, similar to systems used in mature markets.
Clearstream pioneered tri-party collateral management in 1992 and operates the CmaX platform at the center of its Global Liquidity Hub, which links banks, clearing houses and central banks. The Saudi version is expected to mirror that model, supporting greater in the domestic market.
Investor Takeaway
Next Steps and Open Questions
Several design questions remain: which assets will be eligible as collateral, what haircut schedules will apply, and how SCMS will connect with Muqassa’s margining framework and the central bank’s pledge facilities. local government sukuk to anchor the first phase, with corporate bonds and equities added later.
Integration with the Saudi Central Bank’s payment rails could eventually allow settlement in central-bank money, an option Clearstream has deployed elsewhere. The MoU also outlines possible collaboration in fund-administration and digital-securities services once the collateral platform is operational.
Strategic Context
The initiative aligns with Vision 2030 objectives to deepen capital markets and attract long-term foreign investment. For Deutsche Börse, the partnership extends its reach into a quick-growing financial center. For Edaa and the Tadawul Group, it brings international post-trade expertise that could support future products and market segments.
Market participants say the move reflects confidence in the kingdom’s infrastructure reforms. “You don’t build a tri-party system unless the legal, regulatory and liquidity foundations are ready,” one observer said. “It shows the market plumbing is now in place.”
later than eight years of structural work on trading and clearing, Saudi Arabia’s focus has turned to collateral mobility—the element that connects funding, risk and liquidity. The SCMS project suggests that transformation is now entering its operational phase.
