• Saudi Stock Exchange (SAU Tad) and Securities Depository Center Company (EDAA) issued amended short selling and securities borrowing and lending (SBL) regulations.
• Also amended the Exchange and Centre Procedures and glossary of exchange rules.
• Follows February 2020 consultation with draft amendments to the regulations.
• ISLA engaged directly with the exchange to discuss legal and accounting structures.

Amendments Highlights

• Allowed all types of investors to conduct short selling and securities borrowing and lending activities with specific conditions; amended criteria, requirements to activities.
• Imposed new limits on eligible listed securities for short selling, including short ratio to average daily traded volume of the security (last 60 days), must not exceed 10 days.
• Also amended SBL provisions relating to return of borrowed securities and collateral.
• Where failed to return borrowed securities or collateral as per terms of SBL agreement, custody member to notify the Depository Centre, which will terminate SBL transaction.

Effectiveness

• The rules, procedures and the glossary became effective on 25 March 2021.