Saudi Arabia: What happened in 2018 and significant events in 2019
New rules for offering and listing securities: The Capital Market Authority’s (CMA) has issued new Rules of Offering Securities and Continuing Obligations pursuant to a resolution on 27 December 2017 made under the Capital Market Law (Royal Decree No.M/30 dated 2/6/1424H (corresponding to 31 July 2003)).
Read our overview of the new rules.
Updated instructions on book building and allocation of shares in IPOs: The CMA has issued updated “Instructions of Book Building Process and Allocation Method in Initial Public Offerings (IPOs)”, issued pursuant to CMA Resolution No.2-94-2016 dated 15/10/1437H (corresponding to 20 July 2016G) and amended pursuant to CMA Resolution No.4-4-2018 dated 23/4/1439H (corresponding to 10 January 2018G). The updated book building instructions broaden the categories of entities entitled to participate in the book building process to include private funds investing in the Saudi stock exchange (the Tadawul), GCC companies and GCC funds which are majority owned by GCC nationals or governments. The updated rules also include changes to the determination of price range and subscription price (which may now be determined by a financial advisor in coordination with the issuer, subject to certain controls to protect investors), as well as a more flexible mechanism for share allocation.
CMA issues closed-ended public investment funds instructions: The CMA has issued new instructions governing the offering, registration and management of closed-ended investment traded funds in Saudi Arabia. They supplement the CMA’s Investment Funds Regulations. The new instructions, issued pursuant to CMA Resolution No.2-66-2018 dated 22/9/1439H (corresponding to 06/06/2018G), set out conditions for CMA approval to establish such a fund, including that the fund must have total assets of at least SR300 million (approximately US$80 million) and the minimum subscription must not exceed 1,000 unit per unitholder. The regulations also set out investment restrictions, offering requirements and disclosure requirements relating to such funds.