Investors have their say on Saudi rules

Feedback keyboardInterested parties have 30 days to comment on draft rules designed to make the Saudi Arabian equity market more open to foreign investors.

The Saudi regulator, the Capital Market Authority, released a draft of the new rules on Monday. According to an earlier statement from the regulator, the new policies will come into force before the second half of 2017.

“All comments and observations will be taken into consideration for the purpose of issuing the final rules,” says the authority in a statement.

The regulator hopes to increase the number of foreign investors that are eligible for licences to buy stocks directly on the Saudi stock exchange, the Tadawul. Currently, foreign investors must have the equivalent of at least $5 billion under management to qualify. The authority plans to reduce the threshold to $1 billion.

The amended rules will also allow each qualified foreign investor to own up to 10% of outstanding shares from each listed company and for foreign investors as a whole, including expatriates who are resident in Saudi Arabia and overseas investors who buy swaps, to own up to 49%.

Qualified foreign investors are currently only allowed to own up to 5% of outstanding shares in each company and qualified foreign investors as a whole cannot own more than 20%, according to a statement released by the authority last year.

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