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KSA Capital Market Authority to apply Blockchain

The Kingdom of Saudi Arabia’ Capital Market Authority (CMA) has granted to UAE based, Wethaq Capital Markets a permit to use Blockchain and DLT ( distributed Ledger Technology) to arrange the offering of securities, known as Sukuk as a stated to investors. This will be carried out in coordination with the issuer and authorized person assigned by the issuer as an offering advisors. 

According to CMA press release, based upon the Capital Market Law issued by Royal Decree No. (M/30) dated 02/06/1424H, and reference to the Financial Technology Experimental Permit Instructions issued by CMA in 10/01/2018, which aims to provide a regulatory framework that is conducive for the innovation of Financial Technology (FinTech) in the capital market within the Kingdom. In relation to this, the CMA Board of Commissioners issued its resolution to grant Wethaq Capital Markets Platform Company a Financial Technology Experimental Permit (ExPermit) to use Distributed Ledger Technology (DLT) to arrange the offering of securities and custody services. 

This is considered as a fintech Expermit. In 2019 R3 signed a partnership with Wethaq to utilize R3 Corda platform for financial services including the issuance and trade of Sukuk securities. Sukuk is a type of Islamic Financial instrument that is interest free and represents the ownership of an underlying asset. 

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