Saudi CMA approves new rules for book-building, share allocation

​Saudi Arabia’s Capital Market Authority (CMA) has approved updated regulations pertaining to the book building process and share allocation in initial public offerings (IPOs), effective immediately, the regulator said on Thursday.

The amended instructions widen the scope of the participating parties, which will increase the pricing efficiency.

“The categories participating in the book building process were expanded to include GCC investors of legal personality,” the CMA said in a statement.

Moreover, the amended draft eases restrictions related to determining the price range and full coverage of the offering by the participating parties.

It also includes a change of the mechanism of determining the subscription price by allowing the financial advisor in coordination with the issuer to determine the subscription price according to supply and demand forces.

The updated regulations also aim to introduce more flexibility into the mechanism of share allocation, the CMA said.