Saudi Stock Traders Said to Face 60% Increase in Bourse Fees

Saudi Plans to Raise Trading Fees
  • Brokers said to request that cap on their charges be scrapped
  • Boost in commissions comes as bourse plans to sell shares

Saudi Arabia, which is readying an initial public offering of shares in its stock exchange, plans to increase trading fees by more than 60 percent, according to two people familiar with the matter.

The Capital Market Authority, which regulates the industry, told brokers that it is considering an increase in commissions to 0.029 percent per trade from 0.018 percent, the people said, asking not to be identified as the information is private. The new fees, which are split equally between the regulator and the exchange, could be introduced later this year, according to the people. 

“The CMA is considering a change to the trading fee structure and will make the necessary announcement as and when the CMA’s board makes its decision,” a spokesman for the CMA said in a statement. Charges are imposed on both sellers and buyers of securities, it said.

The Tadawul declined to comment.

As a result of the increase in fees, brokers have requested that a 12 basis points limit on how much they can earn from each trade be raised or removed, the people said. Saudi Arabia’s $408 billion stock exchange is the largest in the Arab world. On average nearly 230 million shares change hands a month on the Tadawul, with an average monthly traded value of about $1.4 billion, according to data compiled by Bloomberg. 

The increase in the fees may provide a boost in revenue for the Tadawul, as the stock exchange is known, amid plans for an IPO by 2018. Last week the exchange appointed HSBC’s Saudi unit as financial adviser on the share sale, it said in a statement.

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