Saudi Arabia’s stock exchange, Tadawul, has widened access to short-selling and stock-lending, while tightening some other rules as of March 25, according to a report in Arab News.
As of March 25, all eligible investors in the Saudi market are permitted to sell any stock short. However, new rules stipulate that the short ratio to average daily traded volume of any security should not exceed 10 days and total net short positions must not exceed 10 percent of the free float, according to rules published on the Tadawul website.
Refinements have also been made to collateral rules for those lending and borrowing securities, Arab News says.
The changes were made to develop a regulatory environment consistent with the international best practices and to provide a “motivating and competitive atmosphere with high reliability,” the Tadawul said in the statement.
As Arab News notes, the Tadawul became the first Gulf bourse to allow short selling for institutional investors in April 2017 as it introduced a number of changes to court international investors and appeal to index providers such as MSCI Inc. Abu Dhabi and Dubai followed in October and December of that year, respectively.
