Saudi Exchange Launches Saudi Depositary Receipts
The Saudi Exchange has unveiled Saudi Depositary Receipts (SDRs), a transformative financial instrument that allows investors in the Saudi Capital Market to access shares of international companies directly from their local market.
This initiative marks a significant step in the Kingdom’s ambition to establish itself as a leading global financial hub.
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Key Features of Saudi Depositary Receipts (SDRs)
- Direct Access: SDRs enable Saudi investors to diversify their portfolios by investing in foreign equities without the need for a foreign investor account.
- Local Trading: The receipts are traded and settled in Saudi Riyals on the Saudi Exchange, simplifying access to global markets for local investors.
- Liquidity and Flexibility: Investors can convert SDRs into the underlying foreign shares, which can then be traded on international exchanges. This feature enhances ease of transfer between the Saudi Capital Market and overseas markets.
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Statements from Leadership
- Mohammed Al-Rumaih, CEO of the Saudi Exchange, stated, “The launch of SDRs represents a major milestone in positioning the Saudi Capital Market as a global financial hub. It opens doors for investors to engage with international companies and diversify their investments.”
- Hanan Al Shehri, CEO of the Securities Depository Center Company (Edaa), emphasized that the upgraded post-trade infrastructure supports this innovation, reinforcing Saudi Arabia’s commitment to a dynamic and competitive capital market on both regional and global scales.
Alignment with Saudi Vision 2030
The SDR initiative supports the Financial Sector Development Program (FSDP) under Saudi Vision 2030 by enhancing market accessibility and broadening investment choices for local investors. This development is poised to significantly enhance the investment landscape in Saudi Arabia, fostering greater engagement with global markets.
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