The Saudi Capital Market Authority (CMA) has announced the opening of applications for authorization to carry out commodity exchange activities in the Saudi market. The application period spans 123 days, starting July 1 and ending October 31.
Strengthening Market Infrastructure
Through this initiative, the CMA aims to strengthen the capital market infrastructure, increase the range of financial instruments available in the Saudi capital market, and diversify its products. The authority 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 while taking into account investor confidence and the stability of licensed markets.
Focus on Secondary Market Trading
During this period, the focus will be on trading activities in the secondary market for commodity and metals derivatives contracts. This is intended to enhance the market's attractiveness, benefit market participants, and strengthen the Kingdom's position in global capital markets.
Regulatory Background
The announcement follows the revised Capital Market Law dated September 18, 2019, and the CMA's earlier announcement regarding the approval of the Securities Exchanges and Depository Centers Regulations, published on July 18, 2022. That earlier announcement indicated that the CMA would subsequently determine the periods for submitting authorization applications for securities exchanges and depository centers, as well as the mechanism for submitting them.
Application Process
The CMA has called on all parties interested in carrying out commodity exchange activities in the Kingdom to submit applications for authorization. The application specifically pertains to carrying out such activities in accordance with the authorization requirements set forth in the Securities Exchanges and Depository Centers Regulations, using the designated application form. For further details regarding the authorization process during the current period, including the mechanism for submitting applications, as well as the requirements and procedures, applicants are advised to refer to the document titled 'Authorization to Carry Out Commodity Exchange Activities in the Kingdom of Saudi Arabia.' Inquiries from interested parties will be received by the CMA's Market Infrastructure Institutions Supervision Department.
