In its latest bid to attract foreign investors, Saudi Arabia has relaxed rules over the listing of shares on the kingdom’s main stock exchange, Tadawul. The Capital Markets Authority (CMA) of Saudi Arabia announced the changes yesterday with the aim of increasing the attractiveness of the kingdom to companies looking for less investment stringent regulations.
CMA Chairman Mohammed Bin Abdullah Elkuwaiz is reported saying that the new rules will “create greater opportunities for diversification of investment for investors”.
The amendments are also aimed at increasing the attractiveness of the parallel market (NOMU) – a parallel market that operates with lighter regulations aimed to help small and medium-sized companies achieve growth by providing various funding resources.
Listing in the Parallel Market requires a minimum capitalisation of 10 million Saudi riyals ($2.6 million), and the number of shareholders must range between 35 and 50. They are obliged to list at least 20 per cent of their shares.
Elkuwaiz pointed out that the most prominent amendments are cantered on encouraging the entry of foreign buyers and issuers to the main market and increasing the attractiveness of the domestic market and strengthen its role in the formation of capital.
The changes are part of Crown Prince Mohammed Bin Salman’s ambitious plan to modernise the Saudi economy. A raft of grand proposals has been announced by the prince, including major social reforms. After famously changing laws to allow women to drive and stripping powers away from the kingdom’s religious police, it launched new tourist visas. The latest in the sequence of changes expected to make the conservative kingdom attractive to foreigners saw Riyadh relax laws allowing unmarried foreign couples to rent hotel rooms together.