Muscat Clearing & Depository Company Implements T+2 Settlement Cycle to Strengthen Efficiency in Oman’s Capital Market
Muscat – Muscat Clearing & Depository Company SAOC (MCD) has announced the introduction of a T+2 settlement cycle for securities traded in Oman’s capital market. This new cycle will reduce the settlement period from three business days (T+3) to two business days (T+2) following the trade date. This change marks a significant milestone in the ongoing development of the Sultanate’s capital market infrastructure and aligns it with global standards.
Enhancing Efficiency and Attractiveness
The transition to the T+2 settlement cycle is designed to enhance the efficiency and resilience of post-trade processes. It aims to make Oman’s capital market more attractive to both regional and international investors. By shortening the settlement timeframe, MCD seeks to lower counterparty and settlement risks, accelerate capital turnover, and improve operational efficiency for market participants on the Muscat Stock Exchange.
This new settlement cycle will apply to all transactions executed in the Omani capital market, including equities, bonds, sukuk, and funds, effective from September 1, 2026. The implementation follows extensive coordination with market participants and stakeholders.
Strategic Modernization
MCD emphasized that this initiative is part of a broader strategy to modernize the operational framework of the market. The company aims to ensure that its infrastructure remains aligned with evolving international standards. Numerous leading exchanges and financial markets worldwide have adopted the T+2 settlement cycle to enhance transparency, strengthen market stability, and improve efficiency in securities trading.
The change is expected to improve market liquidity, allowing investors to access their funds more quickly after transactions. Faster settlement cycles can facilitate increased trading activity by reducing the time required to complete transactions, enabling investors to redeploy capital more efficiently.
Comprehensive Preparations
Mohamed bin Said Al Abri, Chief Executive Officer of Muscat Clearing & Depository Company, noted that the transition to the T+2 cycle follows extensive preparation across the entire market ecosystem. He stated that the implementation comes after the approval of the legal framework by the Financial Services Authority, along with extensive coordination with brokers, custodians, clearing members, financial institutions, and investors.
MCD has taken regulatory aspects related to the settlement of custodian client transactions into account, particularly the Delivery versus Payment (DVP) procedures, while considering time zone differences and varying financial market hours. Preparations included system enhancements, operational readiness assessments, and close collaboration with all stakeholders to ensure a smooth transition.
Mitigating Risks and Enhancing Competitiveness
The T+2 cycle is expected to accelerate capital turnover, increase trading activity and market liquidity, reduce margin requirements and operational costs, and align with international standards for emerging market indices. This will enhance the market’s attractiveness to foreign investors.
Al Abri further highlighted that the shorter settlement cycle helps mitigate various risks, including credit, market, and liquidity risks, while aligning the market with global financial trends. The adoption of the T+2 settlement cycle reflects the ongoing commitment of Oman’s capital market institutions to strengthen the regulatory and operational framework while supporting long-term growth and competitiveness.
Commitment to Market Transparency
In recent years, MCD has implemented several initiatives aimed at enhancing market transparency, improving governance standards, and expanding investor participation. The introduction of the T+2 settlement cycle builds on these efforts and reinforces the Muscat Stock Exchange’s position as an attractive investment destination in the region.
Market participants have welcomed this development, noting that alignment with global settlement practices facilitates cross-border investment and improves the overall efficiency of trading and settlement processes. MCD remains committed to closely monitoring global advancements in depository, clearing, and settlement operations, including the anticipated international shift toward a shortened settlement cycle (T+1).
The transition to T+2 represents a significant step in the evolution of Oman’s capital market, as it continues to adopt international best practices and modernize its financial market infrastructure to support sustainable economic development and strengthen investor confidence.
About Muscat Clearing & Depository Company SAOC (MCD)
Muscat Clearing & Depository Company was established under Royal Decree No. 82/98 issued on November 25, 1998, mandating the formation of an entity responsible for securities depository and registration. MCD commenced operations on February 1, 1999, as an Omani closed joint-stock company, majority-owned by Muscat Stock Exchange, along with banks, investment institutions, and brokerage companies.
Source: www.zawya.com
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Published on 2026-04-12 11:47:00 • By the Editorial Desk
