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The Broker To Broker Agreement is essential for establishing formal trading relationships between licensed brokerage firms operating in Saudi Arabia. This document is required when two broker entities wish to conduct securities trading activities with each other, whether for client transactions or proprietary trading. The agreement ensures compliance with Saudi Arabian Capital Market Authority (CMA) regulations, Shariah principles, and relevant financial services laws. It covers crucial aspects such as trading permissions, commission structures, settlement procedures, compliance requirements, and risk management protocols. The document is particularly important in the context of Saudi Arabia's developing financial markets and the increasing sophistication of inter-broker relationships, including both domestic and international trading arrangements.

1. Parties: Identification of the broker entities entering into the agreement, including their CMA license details and registered addresses

2. Background: Context of the agreement and the intention of the parties to establish a broker-to-broker relationship

3. Definitions: Detailed definitions of terms used throughout the agreement, including regulatory and market-specific terminology

4. Scope of Services: Detailed description of the brokerage services to be provided between parties

5. Regulatory Compliance: Obligations regarding CMA regulations, Shariah compliance, and other applicable laws

6. Representations and Warranties: Standard and specific warranties regarding licensing, authority, and compliance status

7. Operating Procedures: Day-to-day operational procedures and requirements for inter-broker dealings

8. Commission and Payment Terms: Structure and methodology for calculating and paying commissions, ensuring Shariah compliance

9. Compliance Requirements: AML/CFT obligations, know-your-broker requirements, and other compliance matters

10. Confidentiality: Provisions regarding the handling of confidential information and client data

11. Term and Termination: Duration of the agreement and circumstances for termination

12. Liability and Indemnification: Allocation of risks and responsibilities between the parties

13. Dispute Resolution: Procedures for resolving disputes, including Saudi law requirements

14. General Provisions: Standard boilerplate clauses adapted to Saudi law requirements