RIYADH: Development funds, banks, and sovereign wealth organizations would find it easier to tap Saudi Arabia’s debt market under a new set of reforms proposed by the Kingdom’s Capital Markets Authority.

These proposed changes, for which the CMA has sought public opinion, aim to enhance market accessibility and stimulate growth by simplifying regulations for issuing these tools.

This will accelerate financing for companies through sukuk and other debt instruments, lower issuance costs, stimulate more offerings, and establish this market as a primary channel for financing businesses and the economy. 

This comes as Saudi Arabia emphasizes advancing its financial sector to attract private and foreign institutional investors for financing critical projects under Vision 2030. 

“The market for sukuk and debt instruments is one of the most important alternatives provided by the financial market to finance public and private sector projects,” said Mohammed El-Kuwaiz, chairman of the CMA. 

“Therefore, these proposed amendments aim to meet the needs of financing entities and diversify their sources, thus contributing to the development of the national economy,” he added. 

According to S&P Global, the growth of the debt market, driven by foreign currency issuance and local currency market expansion, is crucial to meeting growing financial requirements. 

With Vision 2030’s ambitious economic transformation goals, Saudi Arabia's debt market evolution is expected to surpass developments in some mature markets, led initially by government-related entities, major financial institutions, and prominent corporate entities, added the global rating agency. 

The new amendments will enable the Kingdom’s financial institutions to issue debt instruments under specified exemptions, detailing the requirements these entities need to meet.  

This move is intended to broaden the range of issuers and types of debt instruments, thereby strengthening both the sukuk and debt instruments market. 

The new changes also aim to relax the rules related to notifying the CMA and the timelines for such notifications in private offerings, thereby speeding up the process.

The CMA has invited all interested parties and investors to participate in the public consultation for the final version of the amendment, stating that feedback will be carefully considered and studied during the 30-day period ending on Aug. 8, as reported by the Saudi Press Agency.