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  1. Capital Market Authority
  2. Electronic Services
  3. Capital Reduction

Capital Reduction

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A service to submit a request to obtain CMA’s approval to reduce a listed company’s capital

1. Appointment of a Financial Advisor and Preparation of the Required Documents for Submission to the Authority:
Appoint a financial advisor licensed by the Authority to carry out arranging activities, ensure compliance with the relevant regulatory requirements, and prepare the required documents in accordance with the conditions and requirements applicable to a Capital Reduction, as stipulated in the Rules on the Offering of Securities and Continuing Obligations.
2. Filling the Application:
The Issuer’s financial advisor shall fill the application form and attach the required documents in accordance with the conditions and requirements applicable to a Capital Reduction, as stipulated in the Rules on the Offering of Securities and Continuing Obligations.
3. Reviewing and Submitting the Application:
The financial advisor shall review the application, ensure the accuracy and completeness of all information, data, and attached documents, and then submit the application to the Authority.
4.Tracking the Application Status and Receiving the Authority’s Decision:
The Authority’s decision regarding the submitted application will be announced through the Authority’s website.

The issuer must appoint two representatives, one of whom must be a director and the other must be a senior executive, to act as its representatives before the Authority for all relevant purposes relating to the Capital Market Law, the Companies Law, their Implementing Regulations, other relevant laws and the Rules on the Offering of Securities and Continuing Obligations.​
a) Where an issuer wishes to reduce its share capital, it must submit to the Authority a letter of application that includes the minimum information set out in Annex (25) – "Content of letter required for Capital Reduction" of the Rules on the Offer of Securities and Continuing Obligations, for the Authority's approval prior to obtaining the approval of the relevant extraordinary general assembly of the issuer on the capital reduction. The application must be accompanied by the following: 
1) the letter of appointment for the financial advisor;
2) the letter of appointment for the legal advisor (if any);
3) an external auditor’s report on the reasons for the capital reduction and the impact of the capital reduction on the issuer's liabilities;
4) the proposed method of capital reduction and the expected effect of such reduction;
5) a copy of the shareholders' circular as per paragraph b) below; and
6) any other documentation as may be required by the Authority. 
b) Where an issuer wishes to reduce its share capital, it must also produce a circular for its shareholders stating the information required to enable the shareholders to make an informed vote at the relevant extraordinary general assembly. This circular shall include, but is not limited to, the following: 
1) the general structure of the proposed reduction in share capital; 
2) the rationale behind the proposed reduction in share capital, including a reasoned discussion from management in this regard; 
3) the risk factors related to the proposed reduction in share capital; 
4) the proposed timing of the process; and 
5) a statement from the directors of the issuer confirming that in the board's view, the proposed reduction in share capital is in the best interests of the issuer and the shareholders. 
c) The shareholders’ circular - submitted to the Authority in respect of a capital reduction request - must be produced in Arabic language and be annotated in the margin to indicate where the information required by the applicable paragraphs of these Rules have been included and any changes from any previous drafts must be clearly marked. Each draft shareholders’ circular must indicate the draft number and date of submission on its cover page.

...

Target Category

Business

Service Duration

45 Business Days

Service Channels

Unified Business Sector Portal

Service Cost

Free

Payment Channels

Not applicable

 

Frequently Asked Questions

Frequently Asked Questions

Phone

800-245-1111

Email

info@cma.org.sa
User Manual
 

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Last modified date:09/09/2026 - 06:36 AM Saudi Arabia time
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