CMA seeks public feedback on amended draft rules for foreign investment in securities

Logo of Capital Market Authority

The Capital Market Authority (CMA) gave the go-ahead for publishing the amended draft rules for foreign investment in securities, seeking public feedback via Istitlaa platform over 30 days ending Jan. 9, 2023.

In a statement, the authority stated that the main elements of the draft rules include developing the qualification conditions and facilitating requirements that must be met by qualified foreign investors (QFIs). This includes removing the requirements on application for qualification, QFIs assessment agreement and opening of an investment account by QFIs in accordance with the investment accounts instructions. This is besides waiving the requirements of assets under management size for some classes.

The elements also include adding a new channel for foreign investment in Tadawul-listed securities by allowing all foreign natural and legal persons to invest in such securities through discretionary portfolios managed by the capital market institutions. This is bedsides developing conditions on investment of non-resident foreign investors in listed securities through swap agreements, including removing the requirement on the duration of such swap agreements, as well as the requirement to notify the CMA prior to entering into a swap agreement.

Such amendments will likely have a positive impact on encouraging and stimulating investment, as well as increasing the attractiveness and efficiency of the capital market. They will also enhance the market's regional and international competitiveness, as well as support the local economy by attracting new foreign capital, particularly in market offerings and market liquidity. In addition, they will raise market attractiveness, boost its global status, and transform knowledge and experiences to the local capital institutions and investors, which will reflect positively on increasing foreign ownership in Saudi-listed securities.

The Draft Rules can be viewed via the following link: