The Capital Market Authority (CMA) has announced a new mechanism for share purchase and sale commissions.
It confirmed that while framing the new mechanism, transactions below SR10,000 were taken into consideration, as also the needs for capital market development, investor awareness, brokers’ services, and commission rates in capital markets.
The new mechanism for share purchase and sale commissions will be applied to all transactions, and will cancel fixed amount for transactions that are below SR10,000.
Authorized Persons (brokerage firms) may reduce commission for clients within the limits of the broker's portion, the CMA stated.
The CMA explained that determining the maximum amount for commission on purchase and sale of shares of listed companies in the exchange, which was put into effect since July 17, came after studies.
The maximum of commission takes into account the requirements of business development of brokers as well as the development of the capital market services for investors.
Additionally, when examining and making this amendment, CMA stated that it took into account the financial return for the operations of deposit, transfer, registration, settlement and clearing of securities traded within the capital market, which will be adopted by the authority upon the Saudi stock exchange (Tadawul) as part of the amended financial return.
According to the new mechanism, which was approved by CMA board, the maximum of the share purchase and sale commission had increased from 0.00120; that is, 0.120 percent, meaning an equivalent of 12 base points - to be paid by the seller and buyer — being the equivalent of SR 12 for every SR 10,000 of the transaction value, to 0.00155. This is 0.155 percent, meaning an equivalent of 15.5 base points, being the equivalent of SR15 for every SR10,000 of the transaction value.
It confirmed that while framing the new mechanism, transactions below SR10,000 were taken into consideration, as also the needs for capital market development, investor awareness, brokers’ services, and commission rates in capital markets.
The new mechanism for share purchase and sale commissions will be applied to all transactions, and will cancel fixed amount for transactions that are below SR10,000.
Authorized Persons (brokerage firms) may reduce commission for clients within the limits of the broker's portion, the CMA stated.
The CMA explained that determining the maximum amount for commission on purchase and sale of shares of listed companies in the exchange, which was put into effect since July 17, came after studies.
The maximum of commission takes into account the requirements of business development of brokers as well as the development of the capital market services for investors.
Additionally, when examining and making this amendment, CMA stated that it took into account the financial return for the operations of deposit, transfer, registration, settlement and clearing of securities traded within the capital market, which will be adopted by the authority upon the Saudi stock exchange (Tadawul) as part of the amended financial return.
According to the new mechanism, which was approved by CMA board, the maximum of the share purchase and sale commission had increased from 0.00120; that is, 0.120 percent, meaning an equivalent of 12 base points - to be paid by the seller and buyer — being the equivalent of SR 12 for every SR 10,000 of the transaction value, to 0.00155. This is 0.155 percent, meaning an equivalent of 15.5 base points, being the equivalent of SR15 for every SR10,000 of the transaction value.
