CMA endorses strategic plan for 2024-2026

The Capital Market Authority (CMA) ratified the 2024-2026 strategic plan aimed at the continuous market development, in line with the requirements of the next stage, and in accordance with the Financial Sector Program plan, serving the objectives of Saudi Vision 2030 to build an advanced capital market.

According to a statement issued by CMA, the strategic plan aims to achieve the authority's vision for the Saudi capital market to become a fundamental source of financing and investment for the development of the national economy, while also being one of the key global capital markets.

The CMA's strategic plan is based on three main pillars that cover nine strategic objectives. It also includes a package of initiatives to achieve these goals:

- First pillar: It aims to activate the Saudi capital market’s role in financing and investment by bolstering the role of the stock market and equity in financing, sukuk and debt instruments, enabling the growth of the Kingdom's asset management industry, while enhancing the Saudi Exchange’s services to attract more international investments.

- Second pillar: It aims to empower the capital market’s system by supporting and enabling financial institutions and supporting fintech.

- Third pillar: It aims to protect investors' rights by strengthening transparency and oversight, facilitating means of compensation, and enhancing ways of addressing matters and deterrence efficiency.

Under the strategic plan, the CMA developed a set of initiatives that seek to achieve several relevant goals, namely enabling the listing of special purpose acquisition companies (SPACs) in Nomu-Parallel Market and the offering of Saudi depositary receipts.

In a bid to stimulate the growth of the asset management industry, the authority will work to develop the regulatory framework for financing funds and enable the establishment of more flexible fund structures, in addition to developing regulatory frameworks for increasing/decreasing the total value of assets of public and traded closed-end mutual funds.

At the level of developing the sukuk and debt instruments market, the CMA will work to establish a regulatory framework for green and environmental, social, & governance (ESG)-linked bonds. This is besides streamlining the regulatory frameworks for offering, listing and registering debt instruments, while developing that related to issuing sukuk and debt instruments by closed-ended REITs.

According to the statement, CMA aspires, through its strategic plan, to make the Saudi capital market more appealing to foreign investors, and for the Saudi Exchange to be a regional and international frontrunner. It also seeks to grow the volume of managed assets and to double the number of fintech-licensed companies by the end of 2026.

The authority has also adopted other initiatives, including developing investment account instructions, activating the administrative services activity for funds, studying amending the minimum capital requirement for practicing custody works, and enabling the application of open finance within the local capital market.

As for rights protection, the CMA is working to develop procedures for class action compensation, support, and assistance to investors in private rights. This is in addition to improving the process of handling complaints among financial market institutions and their clients.

In terms of enhancing transparency, the CMA will work on developing the corporate governance regulations, raising the efficiency of mutual fund governance and the responsibilities of board members, coupled with some development initiatives.