Saudi Capital Market Authority Studies Amending Foreign Ownership Limits in Listed Shares

Chairman of the Saudi Capital Market Authority Mazen Al-Sudairi stated that the authority is still reviewing amendments to foreign ownership limits in shares listed on the Saudi market, and may introduce additional regulatory measures for public offerings, according to Chinese platform "Cailianshe" on October 4. The official's statements indicate that the file is still under study, and any rule changes will not be issued prior to completing coordination with relevant entities.

Al-Sudairi explained that the authority is coordinating on this matter with other government entities, rather than announcing a specific cap on foreign ownership that might later be revised. This approach leaves the door open to multiple potential formulas, making it likely that any upcoming announcement will come as an integrated package of amendments rather than a single number announced early and then reviewed.

The current ceiling for foreign strategic investor ownership in Main Market shares stands at 49%. This cap defines the maximum percentage that a single foreign investor or related group can own in companies listed on the Main Market. This figure is one of the key indicators international investors monitor when evaluating entry into the Saudi market or increasing their existing positions.

Discussions about this study come at a time when regional markets are competing to attract foreign capital, as any raising of the cap is linked to foreign investors' ability to build larger positions in listed companies, and the volume of inflows the exchange can receive. The official did not announce a new ceiling or a timeline, leaving any potential amendment subject to consensus among relevant government entities before approval.

What do these terms mean?

Foreign strategic ownership: A significant stake owned by a foreign investor in a listed company and held long-term. Main Market: The largest market in the Saudi Stock Exchange where major companies are listed, as opposed to the "Nomu" market designated for smaller companies. Initial Public Offering (IPO): Selling shares of a company to the public for the first time. Secondary Offering: Selling existing shares owned by current shareholders without issuing new shares.