Muscat – The Muscat Clearing and Depository Company (MCD) has announced the implementation of a new settlement cycle for securities traded on the Omani capital market, reducing the settlement period from three business days to two business days after the trade execution date.

The move marks a significant milestone in the development of capital market infrastructure in Oman and reflects the market’s alignment with international best practice in global financial markets.

The transition to the shorter settlement cycle is expected to enhance the efficiency and flexibility of post-trade operations, while also boosting the attractiveness of the Omani capital market to regional and international investors.

The company said the change would help reduce counterparty and settlement risks, accelerate capital turnover, and improve the operational efficiency of investors and market participants on the Muscat Stock Exchange (MSX).

The new settlement cycle will apply to all securities listed on the MSX, including equities, bonds, sukuk and funds, effective September 1, following coordination with MSX members and relevant stakeholders.

MCD said the initiative forms part of a broader strategy to modernise the clearing and settlement infrastructure and ensure alignment with evolving international standards. Many global stock exchanges have already adopted shorter settlement cycles as part of efforts to enhance transparency, stabilise financial markets and improve trading efficiency.

The change is also expected to support liquidity in the Omani capital market by enabling investors to access funds more quickly after transactions. It is further expected to encourage trading activity by reducing processing times and allowing more efficient reinvestment of capital.

Mohammed bin Said Al Abri, CEO of MCD, said the transition to a two-business-day settlement cycle followed comprehensive preparations across all components of the market infrastructure and received approval of the legal framework from the Financial Services Authority. This was done in close coordination with brokers, custodians, clearing members, financial institutions and investors.

He said operational and regulatory considerations had been addressed, particularly in relation to delivery-versus-payment (DVP) arrangements for custodian clients, taking into account time zone differences and varying exchange operating hours. He added that preparations also included upgrading technical systems, conducting operational readiness tests, and maintaining continuous coordination with stakeholders to ensure a smooth transition.

He added that the initiative would help accelerate capital turnover, increase trading activity and liquidity, reduce margin requirements and operational costs, and support compliance with international standards for emerging market indices, thereby enhancing the market’s attractiveness to foreign investors.