Conducting Settlement operations in an efficient and secure manner. Aiming for continuous improvement and innovation in delivering these services to our members.
All types of securities’ transactions are completed within settlement timing determined by the Exchange. Normal exchange transactions are settled two business days following the transaction execution date; i.e. (T+2).
Negotiated deals can have different settlement cycles that can range from T+0 up to T+5, and buy-in trades settle on trade date (T+0).
“Edaa” performs Settlement of transactions in securities, concluded at the Saudi Stock Exchange.
The settlement is a process for settling the obligations arising from the concluded transactions in securities and the preparation procedure for the settlement of such transactions by checking the availability of the required securities and cash.
The settlement of transactions in securities executed on a delivery versus payment (DvP) basis which means the transfer of securities based on trade transaction is conducted through simultaneous exchange of securities and cash.
Securities settlement is executed on a gross basis on the securities side and the cash settlement side is netted (Bank for International Settlements (BIS) DvP Model 3). This means that the exchange of securities is done between the securities accounts of the participants in the trade transaction (buyer and seller), and the exchange of the funds is done at the same time between special accounts intended for settlement of trade transactions of Edaa members at Saudi Central Bank (SAMA).
Settlement failure occurs if settlement instructions was unable to settle on intended settlement date.Fails management procedures are defined and conducted by Muqassa; Edaa rolls over failed transaction to following date until Muqassa cash compensation period starts. Edaa cancels unsettled transactions (exchange member vs investor) on the same date as Muqassa cash compensation. Any compensation and substitution amount defined in Muqasssa fails management procedures shall be reflected to investor by Exchange members. .
“Edaa” centrally settles market claims resulting from failed trades between Settlement Members.
Market claims are generated with claim transaction in the system; a derived transaction from failed instruction.
Settlement limits are pre-determined limits set by Settlement Members in association with SAMA for the custody member which are updated at system; taken into consideration by Edaa at cash settlement process.
- Eliminating principal risk through Delivery vs. Payment (DvP) and settlement through SAMA
- State of the art infrastructure ensuring high straight through processing (STP)ratio in all parts of the process
- Reduction of liquidity requirements due to efficient netting in the clearing process
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