As part of the Capital Market Authority's ("CMA") strategic objectives to develop the capital market, and based on the Capital Market Law issued by Royal Decree No. (M/30), dated 02/06/1424 H, the CMA Board issued its resolution to publish the draft of Regulatory Framework for Equity Crowdfunding ("Draft"), for public consultation for a period of (45) calendar days ending on 10/11/1443H corresponding to 09/06/2022G.
The Draft aims to support financial technology innovations in the capital market by setting out a regulatory framework for equity crowdfunding, including determining the requisite authorisation for capital market institutions to carry it out, and to enable companies that have a Financial Technology Experimental Permit to obtain the appropriate authorisation to practice it as a capital market institution, in line with international best practices.
The main elements of the Draft are as follows:
a)Regulating share offering through capital market institutions that are authorised to carry out arranging activities in the course of carrying out securities crowdfunding.
b)Setting the requirements for custody of clients' money received by capital market institutions that are authorised to carry out arranging activities in the course of carrying out securities crowdfunding, and opening and operating investment accounts.
The CMA, with full gratitude, would receive the opinions and comments of relevant and interested persons, through any of the following:
a)The Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform), affiliated with the National Competitiveness Center, through the following link: (istitlaa.ncc.gov.sa).
b)The prescribed form through the following email: (Laws.Regulations@cma.org.sa).
All comments will be taken into full consideration for the purpose of finalizing the Draft.
The Draft can be viewed via the following link:
Draft Regulatory Framework for Equity Crowdfunding
Prescribed form for providing comments
