Saudi eases foreign investor access to capital markets

Thursday, 11 January 2018 00:28 - - {{hitsCtrl.values.hits}}

Saudi Arabia’s Capital Market Authority (CMA) has amended rules governing the kingdom’s qualified foreign investor (QFI) program, making it easier for foreign financial institutions and their managed funds and subsidiaries to qualify, and expanding the range of institutional investors eligible for the program.

The key changes to

existing rules include:

Eliminating the requirement for CMA review and approval of QFI qualification
Lowering the assets under management (AUM) requirement for QFIs from $ 1 billion to $ 500 million
Automatically qualifying subsidiaries and managed funds of QFI applicants without the need to submit separate applications
Easing of some continuous obligation requirements of QFIs.

Other key capital market reforms implemented by CMA in 2017 include:

Introduction of NOMU, a parallel equity market for Qualified Investors - Tadawul introduced NOMU, the CMA allowed foreign investors access
The introduction of T+2 settlement
Enabling securities borrowing and lending ‘SBL’ and short selling
Adoption of new corporate governance rules
Adoption of International Financial Reporting Standards (IFRS) for listed companies on the Saudi Stock Exchange
Enabling foreign participation in Saudi domestic IPOs
Adoption of updated regulations governing Mergers and Acquisitions

The move comes as part of CMA’s strategic objectives to develop the capital market and expand institutional investments, said a statement from the authority.

The amended rules for QFI qualification will come into force from 23 January.