Saudi Capital Market Authority Plans to Launch Reform Package Within 90 Days

Chairman of the Saudi Capital Market Authority, Mazen Al-Sudairi, stated that the Authority intends to launch a new package of reforms within 90 days, including raising the retail allocation in initial public offerings to around 30%, and redefining responsibilities among advisors, lead managers, and issuers.

Al-Sudairi explained that the package also includes tightening oversight on algorithmic trading and introducing new controls for short selling, in a move aimed at regulating market participants' behavior and mitigating risks that may arise from rapid automated trading.

The plan also includes a review of foreign ownership limits in listed equities, a third element expanding the scope of reforms to cover rules on foreign investor ownership and their impact on capital flows into the Saudi market.

The planned reforms simultaneously address listing, trading, and ownership. The Authority set a 90-day deadline for their implementation, making them among the most notable upcoming regulatory changes in the Saudi capital market in the coming period, as market participants await the release of detailed texts.

What do these terms mean?

Initial Public Offering (IPO): Selling a company's shares to the general public for the first time in the market. Short Selling: Selling shares that the seller does not own in the hope of buying them back later at a lower price. Algorithmic Trading: Executing buy and sell orders automatically through high-speed computer programs.