SAMA works on netting regulations, market framework

SAMA works on netting regulations, market framework

Riyadh – Mubasher: The Saudi Central Bank (SAMA) has been working on establishing netting regulations and developing a comprehensive framework for the local market, said Yazeed Alnafjan, Deputy Governor for Financial Innovation.

SAMA’s recent efforts aim to improve the financial stability and resilience of the financial sector, with a focus on market stress and counterparty default, Alnafjan explained on the sidelines of the third edition of the Saudi Capital Market Forum (SCMF), according to a press release.

He stated that a netting framework would bring Saudi Arabia in line with international best practices, driven by SAMA's commitment to ensuring the Saudi financial sector remains attractive and facilitates better interaction with international markets.

Alnafjan added that the netting regulations would also enable SAMA to request banks to relocate many offshore transactions currently held offshore, transitioning from the traditional offshore special purpose vehicles model to onshore operations.

This move aims to concentrate liquidity in the market further without compromising financial stability, he noted.

The SCMF, held between 19 and 20 February 2024, continued its success from the previous editions, under the patronage of Mohammed Al Jadaan, Saudi Arabia’s Minister of Finance and Chairman of the Financial Sector Development Program.

With the theme "Powering Growth," the forum featured over 54