Saudi swaps to last four years
Riyadh, August 26, 2008
Swap agreements allowing non-resident foreign investors indirect ownership in listed Saudi firms will last a maximum four years, the Saudi bourse regulator was quoted as saying on Tuesday.
The Capital Market Authority (CMA) last week said foreign investors were allowed to sign swap agreements with authorised Saudi intermediaries, in one of the boldest moves the kingdom has taken so far to open its stock exchange to foreign ownership.
CMA did not, however, publish regulations governing these agreements.
The regulator has sent a memo to Saudi brokerage and asset management firms outlining 11 guidelines for these agreements, according to al-Eqtisadiah newspaper.
Among these were that the stocks swap agreements will last a maximum four years, licensed intermediaries must avoid credit risks that may arise from swap agreements and that they must be paid for in full and that intermediaries must ensure regulations for swap agreements are met, accoridng to al-Eqtisadiah.
CMA's website did not carry these regulations and spokesman Abdulaziz Alzoom could not be reached for comment. - Reuters