The Capital Market Authority's (“CMA's") Board issued its resolution to publish the Amended Draft Rules for Foreign Investment in Securities (“Draft Rules") for Public Consultation for a period of thirty (30) calendar days ending on 16/06/1444 AH, corresponding to 09/01/2023 G.
The main elements of the Draft Rules represented in developing the qualification conditions and facilitating requirements that must be met by the qualified foreign investors (QFIs), including removing the requirements on application for qualification and QFIs assessment agreement and only requiring the QFI to open an investment account in accordance with the Investment Accounts Instructions. In addition, waiving the requirements of assets under management size for some classes. Also, adding a new channel for foreign investment in the Main Market-listed securities by allowing all foreign natural and legal persons to invest in the Main Market-listed securities through discretionary portfolios managed by the Capital Market Institutions. Furthermore, developing conditions on the investment of the non-resident foreign investors in listed securities through Swap Agreements, including removing the requirement on the duration of such swap agreements, as well as removing the requirement to notify the CMA prior to entering into a Swap Agreement.
It is expected that such amendments will have a positive impact on encouraging and instigating investment, increasing the attractiveness and efficiency of the capital market, enhancing its regional and international competitiveness, and supporting the local economy by attracting new foreign capital, particularly in market offerings and market liquidity, raising market attractiveness, boosting its global status, and transforming knowledge and experiences to the local capital institutions and investors, which shall be positively reflected on foreign ownership increase of Saudi listed securities.
It is worth noting that the Amended Draft Rules aim to develop the provisions regulating foreign investment in securities, facilitate access to the regulatory frameworks regulating foreign investment in securities by collecting the regulating provisions in a single regulatory document. As well as facilitate QFI entry procedures to invest in the Saudi capital market and enable the same step on a large scale in other investment classes.
The CMA, with full gratitude, would receive the opinions and comments of relevant and interested persons, through the Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform), affiliated with the National Competitiveness Canter through the following link: (istitlaa.ncc.gov.sa), or the prescribed form through the following email: (Laws.Regulations@cma.org.sa). All comments will be taken into full consideration for the purpose of approving the final text of the Draft Rules.
The Draft Rules can be viewed via the following link:
The Amended Draft Rules for Foreign Investment in Securities
