The risk management policy at the SDC stems from its vision, mission, and objectives of enhancing investor confidence in securities and reducing risks related to the settlement of trading transactions executed through the market. It is consistent and integrated with the SDC’s culture and core values that policy emerged and from that all decisions and strategies related to managing the SDC’s risks.

Methodology of Risk Management 
The SDC's risk management methodology includes a clear mechanism that is compatible with the best international practices concerned with risk management and in harmony with the essence of (ISO 31000) standards. This methodology includes procedures needed to deal with potential risks, and usage of tools and standards to measure and evaluate the effectiveness of risk management, and identify the events likely to be encountered during the applying the risk management strategies at the SDC.
This methodology consists of the following steps:

• Identifying the context: Analyzing the internal and external environment and reviewing the strategic objectives to ensure that activities are consistent with the vision and mission of the SDC.
• Identifying risks: Studying potential risks that may affect the process of achieving institutional objectives.
• Continuous risk assessment: Determining the severity of each process or activity and prioritizing them based on the likelihood of their occurrence and the resulting impact.
• Developing and implementing a risk response plan: Developing and implementing strategies and plans to deal with potential risks, and monitoring their implementation.
• Monitoring, documentation and review: Monitoring and controlling risks to ensure the effectiveness of procedures and verifying the achievement of objectives, reviewing and updating plans and policies based on emerging changes.

The basic pillar for the success of the risk management process
The basic pillar for the success of the risk management process begins with the continuous encouragement to adopt a risk management culture, enhancing awareness of its importance, and involving the risk management unit in important activities, functions, and the decision-making process. This aims to make comprehensive decisions that consider the challenges and opportunities associated with these decisions, which contributes to developing a clear understanding of the events that the SDC may be exposed to and that may result in potential risks.

General Principle for Risk management Policy
The basic principle on which the SDC's risk management policy is based stems from the fact that the SDC is a public utility institution established under the Securities Law, and does not aim to make a profit. Therefore, all operational risks associated with the tasks assigned to the SDC must be avoided. Since it is known that not all risks can be completely eliminated, the impact of some less important types of risks can be accepted or reduced based on measuring the degree of potential risk versus the cost of completely avoiding it.