Saudi Arabia's stock exchange, the Tadawul, has signed an agreement with Nasdaq to revamp the infrastructure of its markets.
The deal will involve upgrading Tadawul's post-trade technology, including registry, depository and risk management. The modifications should be completed during the second half of 2020.
The move comes as Saudi Arabia is attempting to expand its economy beyond its reliance on oil. It also coincides with an ongoing battle between some of the world's largest stock exchanges to lure state-owned oil giant Saudi Aramco to their markets for a mega-float – just last month, US president Trump said he wanted Saudi Arabia to “strongly consider the New York Stock Exchange or Nasdaq”.
“The ambition of Tadawul to become an innovative, world-leading exchange company is not only admirable but inspiring to our industry,” said Adena Friedman, president and chief executive of Nasdaq.
“By addressing the demand to overhaul, modernise and evolve its post-trade infrastructure, this demonstrates a clear vision by Tadawul to attract capital – both domestic and foreign – and present Riyadh as a major financial destination.”
As well as introducing a new central counterparty clearing system, Nasdaq's technology will allow Tadawul and market participants to introduce new asset classes to the market and offer new services to investors.
Nasdaq already operates a number of stock exchanges around the world, including the Nasdaq Stock Market in New York and the Nasdaq Nordic in Stockholm.