Saudi Arabia's Emerging Securities Lending Market

This document is a report detailing the evolution of Saudi Arabia's securities lending market, highlighting its emergence as a significant player in global securities finance. The report outlines the foundational efforts made by regulatory bodies, such as the Capital Market Authority and the Saudi Depository Center Company, which have established a robust framework for securities borrowing and lending since 2017. Key milestones include the introduction of close-out netting legislation in February 2025, which enhances legal certainty and reduces credit risk. The document describes the technological advancements that have facilitated market growth, emphasizing the shift from manual to automated processes. It also addresses the challenges faced by local and international participants, including the need for education on securities lending practices and the importance of aligning with international standards. Furthermore, the report notes the regional impact of Saudi Arabia's developments on neighboring Gulf Cooperation Council countries, fostering a collaborative ecosystem aimed at long-term growth in the securities lending sector.