RIYADH: Saudi Arabia’s Capital Market Authority has approved its largest regulatory overhaul to date for the sukuk and debt instruments market, marking a significant step in the country’s financial sector development.
The newly approved changes introduce key amendments to the rules on the offer of securities and continuing obligations, particularly related to the issuance of debt instruments.
These adjustments simplify prospectus requirements for public, private, and exempted offerings, streamlining the process and reducing regulatory burdens.
These changes will take effect as soon as they are published and are designed to attract a wider range of issuers and foster deeper investment in the market.
“By facilitating the listing requirements for debt instrument, we are increasing the attractiveness of the local debt capital market to drive increased participation from issuers and investors,” Mohammed Al-Rumaih, CEO of the Saudi Exchange, said.
The amendments to the listing rules of debt instruments mark a significant milestone in the continued development of Saudi Arabia’s debt capital market, further reinforcing our commitment to building a globally competitive and sophisticated debt capital market.”
The reforms aim to strengthen Saudi Arabia’s regulatory framework for debt instruments, creating a more dynamic and accessible market. Notably, the amendments allow the Kingdom’s development funds, sovereign wealth funds, and development banks to issue debt instruments through exempt offerings, subject to specific conditions.
This flexibility will enable these institutions to better align their financing strategies with Saudi Arabia’s broader development goals.
“As we move forward, the Saudi Exchange remains focused on providing a robust platform for debt financing that supports the Kingdom’s Vision 2030 ambitions, specifically the Financial Sector Development Program aspirations in deepening the debt capital market,” Al-Rumaih said.
The new regulations also simplify the documentation process for public offerings, reducing prospectus requirements by more than 50 percent.
A dedicated section for public offerings will improve regulatory clarity, ensuring that all material information is disclosed to investors while maintaining investor protection.
In addition to easing public offering requirements, the changes introduce more flexibility for private offerings. The CMA has eliminated the prior requirement for advance notification before launching an offering.
Issuers can now notify the CMA and immediately proceed with their offerings, a change that is expected to expedite the financing process and improve efficiency.
These regulatory enhancements are part of Saudi Arabia’s broader efforts to develop its sukuk and debt markets as a crucial funding channel for businesses.
By improving access to financing, the reforms are expected to drive greater economic growth and help position the sukuk and debt markets as central components of the Kingdom’s financial ecosystem.
The reforms align with Saudi Arabia’s Vision 2030 strategy, which seeks to diversify the economy and enhance the capital markets. They also reflect the CMA’s ongoing commitment to improving market transparency, protecting investors, and increasing market participation.
In parallel, the CMA recently invited public feedback on amendments to the investment funds regulations, which are also part of efforts to refine the framework for private and foreign investment funds, particularly in retail markets. These changes aim to better protect retail investors, addressing risks that emerged from a 2021 regulation allowing individual retail investments up to SR200,000 ($53,245).
The consultation period for these proposed changes will run for 30 calendar days.
With these far-reaching regulatory reforms, Saudi Arabia is poised to further strengthen its sukuk and debt markets, positioning them as key drivers of economic growth and investment. The CMA’s efforts to enhance transparency and investor protection are expected to boost both domestic and international confidence in the Kingdom’s financial markets.
