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Pact to enhance Oman’s connectivity with global financial markets

New milestone: CMA and MCD collaborate with Euroclear Bank to set up new central securities depository account

The Capital Market Authority (CMA) together with the Muscat Clearing & Depository Company SAOC (MCD) have collaborated with Euroclear Bank SA/NV based in Belgium to establish a new Euroclear international central securities depository (CSD) account in the Sultanate of Oman which will be operated by MCD.

Abdullah bin Salem al Salmi, Executive President of the CMA, said, “This important initiative led by the CMA is part of our continuous efforts to enhance and develop the financial market in the Sultanate of Oman and to enhance our global connectivity to the international financial markets.”

Mohammed Abdulhadi, General Manager of MCD, commented, “With this collaboration with Euroclear Bank, MCD will be the sole point for all Euroclear transactions in Oman and we certainly look forward in working together with all market players to provide our cost effective services of Euroclear.”

Bernard Ferran, General Manager, Europe, Middle East & Africa at Euroclear Bank, added, “We are pleased to see further advancements in the Omani financial markets with the opening of this account in Euroclear Bank which will create cross borders settlement efficiencies.”

This new Euroclear account will provide Omani issuers and investors easier access to the global financial markets and Europe’s biggest settlement house for securities, while providing global connectivity to the Muscat Stock Exchange (MSX) and MCD through the Euroclear Bank system.

As such, an investor already having an MCD account in Oman does not need to incur the additional cost nor the hassle to open another CSD account with Euroclear to invest in any instruments listed in other international financial markets connected to Euroclear.

In fact, it will be a more cost effective way to maintain just one account with MCD which is connected to Euroclear Bank’s system. I n addition, in this initial stage, it will also widen the investors’ base for Oman by enhancing the ease of access and participation from foreign investors to invest in multi-currency fixed-income instruments with eurobond or Sukuk structures issued by the Oman government or Omani companies from Oman and listed on the MSX.

This means that a foreign investor with an existing Euroclear account in Europe also does not need to incur the additional cost nor the hassle to open another CSD account with MCD in Oman to invest in an international eurobond or Sukuk structure issued from Oman.

With easier access and more participation by foreign investors, this will hopefully encourage more primary and secondary trading activities and enhance the liquidity of the instruments and the MSX.

As such, with this new initiative, we also hope to widen the issuers’ base and encourage more local and international institutions and companies to issue and dual list their multi-currency eurobonds or Sukuk in Oman and other countries connected to the Euroclear system.

Al Salmi, Executive President of the CMA, also commented, “This is just the initial stage of our collaboration with Euroclear. In the next stage, we hope to provide full access to international investors with Euroclear accounts to invest and trade in any securities listed on the MSX, and not just fixed-income instruments with eurobond or Sukuk structures.”

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