HSBC Saudi Arabia has become the first custodian to establish an electronic link with the Saudi Arabian market through a partnership with FinTech firm DirectFN.
The connection between HSBC and Saudi Arabia’s EDAA ICM Central Depository System, based on DirectFN’s central custody system (ICMS), will enable the custodian to carry out straight-through processing (STP) depositary operations in the newly classified emerging market.
HSBC will enable direct portfolio management, as well as electronic trading and deposit account management linked to the Saudi securities depository centre.
“This will facilitate the creation and management of portfolios and the rapid exchange of information with the SDC and other useful services in the digital age,” said Ahmed AlShammari, head of service delivery, HSBC Securities Services, HSBC Saudi Arabia.
Since Saudi Arabia opened its doors for foreign investors in 2015, HSBC has emerged as the largest custodian in the country.
Investment into the Kingdom is set to increase significantly after it achieved emerging market status from MSCI last month, after it made a number of improvements to its capital markets, including passing rules easing foreign institutional investment, increasing the number of qualified foreign investors, and moving to a T+2 settlement cycle.