RIYADH: Saudi clearinghouse Muqassa has announced a partnership with Fidelity Information Services Global to enhance trade automation for market participants.
In an interview with Arab News during the Capital Markets Forum in Riyadh, Wael Al-Hazzani, Muqassa’s CEO, stated that the collaboration marks a significant step in expanding the firm’s services and improving operational efficiency within the Kingdom’s financial markets.
“Today we announced our collaboration with FIS, one of the biggest technology providers, to facilitate automation for market participants,” said Al-Hazzani, adding: “This will be part of our solution, hopefully in the second half of this year.”
The CEO emphasized that while FIS is the first provider, Muqassa intends to partner with additional technology firms.
“FIS is a big player in this field, and international market participants use it heavily. We are complementing our offering to reach clients familiar with FIS, but this won’t be the last partnership — we will announce others soon,” he said.
Muqassa, which plays a central role in clearing exchange-traded products and providing risk management, is also expanding its services to the over-the-counter market.
“Currently, we clear repo transactions traded OTC (over-the-counter), and next in the pipeline are OTC interest rate derivatives,” Al-Hazzani said, adding: “We aim to launch this service in 2025, pending regulatory alignment and technology testing.”
In addition to enhancing clearing services, Muqassa is advancing its role in the Kingdom’s fixed-income market. The company has increased the number of government sukuk eligible as collateral for clearing members.
“Previously, only cash was accepted as collateral. Now, all government sukuk can be included in the collateral basket,” Al-Hazzani said.
“This provides relief to clearing members, allowing them to use part of their balance sheet sitting in sukuk instead of cash,” he continued.
Currently, up to 20 percent of a clearing member’s collateral pool can consist of government sukuk, but Muqassa plans to expand this as market liquidity improves. “As the market matures, we are interested in increasing the weight of acceptable sukuk for collateral,” Al-Hazzan added.
Looking ahead, Muqassa is prepared to accept a broader range of securities as collateral, provided they meet liquidity requirements.
“By rules and by technology, we are ready to accept any type of security as collateral,” Al-Hazzani said, going on to say: “The key prerequisite is liquidity— there must always be a buyer in the market in case liquidation is needed. As we grow, we will gradually expand the eligible basket of collateral to include equities, bonds, and stocks.”
While Muqassa’s immediate focus remains on the Saudi market, it has long-term plans to expand regionally.
“We are still a young company with many initiatives ahead, but our next step will be to explore markets in the GCC and beyond,” Al-Hazzani said.
Muqassa was established as part of Saudi Arabia’s Financial Sector Development Program to enhance market efficiency and attract global investors.
By centralizing counterparty risk management and aligning with global clearing standards, Muqassa aims to support the continued evolution of the Saudi financial market.
