Broker Client Agreement Template for Saudi Arabia

The Broker Client Agreement is a fundamental document required for establishing a securities trading relationship in Saudi Arabia. It is used when a licensed broker begins providing brokerage services to new clients, whether individual, corporate, or institutional. The agreement must comply with the Capital Market Authority's regulations, particularly the Authorized Persons Regulations and Securities Business Regulations, while ensuring adherence to Sharia principles. It contains essential provisions covering account opening, trading procedures, fee structures, client money protection, risk disclosures, and regulatory compliance requirements. This document is crucial for both brokers and clients as it sets out their respective rights, obligations, and responsibilities within the Saudi Arabian regulatory framework, including specific provisions for client classification, trading limitations, and mandatory disclosures.

1. Parties: Identification of the licensed broker and the client, including full legal names, addresses, and registration/license details

2. Background: Context of the agreement, broker's regulatory status, and general purpose of the relationship

3. Definitions: Key terms used throughout the agreement, including regulatory and technical terms

4. Scope of Services: Detailed description of brokerage services to be provided, including any limitations

5. Regulatory Compliance: Statements regarding compliance with CMA regulations and Sharia principles

6. Client Classification: Classification of the client according to CMA regulations (retail/institutional) and resulting implications

7. Account Opening and Operation: Procedures for opening and operating the brokerage account

8. Trading Instructions: Methods for giving trading instructions and their execution

9. Fees and Commissions: Detailed breakdown of all fees, commissions, and charges

10. Client Money and Assets: Handling and protection of client funds and securities

11. Risk Disclosures: Mandatory risk warnings and disclaimers

12. Representations and Warranties: Standard representations and warranties from both parties

13. Confidentiality: Provisions regarding confidential information handling

14. Term and Termination: Duration of agreement and termination provisions

15. Governing Law and Jurisdiction: Saudi law as governing law and dispute resolution mechanisms