The Capital Market Authority (CMA) called upon relevant and interested persons participating in the capital market to share their feedback on the Draft regulation governing the direct listing of subsidiaries of companies listed on the Main Market. The consultation period will last for 30 calendar days, ending on 08/10/1447H, corresponding to 27/03/2026.
The proposed draft aims to enable subsidiaries of companies listed on the Main Market to directly list their shares on the Main Market without undergoing an initial public offering process, thereby reducing the time and procedures required and lowering the costs associated with listing in the Saudi capital market. The draft also seeks to provide additional investment opportunities in the Saudi capital market, contributing to market depth and the diversification of investment products, while maintaining high levels of transparency and investor protection.
The proposed amendments include permitting the issuer and its financial advisor, prior to obtaining the CMA's approval of the share registration application, to present information about the issuer and its financial statements to a group of potential investors to assess their interest in investing upon the direct listing on the Main Market. The proposal also allows the disclosure of such information to a specified group of Capital Market Institutions licensed to conduct advising activities for the purpose of preparing research and financial reports, subject to the condition that such research and reports shall not be published prior to obtaining the CMA's approval.
The proposed draft also emphasizes the importance of appropriate disclosure through regulating the requirements for share registration on the Main Market, including the submission of a registration document to the CMA. The draft further regulates the information required to be included in such registration document, including clarification of the mechanism for determining the guiding share price and the risks associated with such mechanism.
Pursuant to the proposed draft, the Rules on the Offer of Securities and Continuing Obligations, as well as the Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority, will be amended to allow this type of listing. This is expected to deliver several benefits, including enhancing the market capitalization of the Main Market with lower risk, through the listing of companies with greater familiarity and experience with market regulations, in addition to deepening the market by increasing the number of listed companies across multiple sectors.
The CMA emphasized that the comments of relevant and interested persons shall be taken into full consideration for the purpose of approving the final proposed amendments, which in turn shall contribute to the aim of enhancing and developing the regulatory environment.
Opinions and comments can be received through any of the following:
•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).
•The prescribed form through the following email: (Laws.Regulations@cma.org.sa).
The Draft can be viewed via the following links:
The Draft Amendments to the Rules on the Offer of Securities and Continuing Obligations and the Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority
Prescribed form for providing comments
