2025-10-03
Saudi Arabia Seeks To Scrap Foreign Equity Investor Requirements
Saudi Arabia is proposing to open its equities to all foreign investors by easing existing restrictions, as the regulators seek to boost flows into one of the region’s biggest markets.
The Capital Market Authority known as CMA is seeking feedback on a draft law that would open the main market to all categories of non-resident investors, it said in a statement on its website on Wednesday.
Current rules stipulate that foreigners must meet certain qualifications, such as having at least $500mn in assets under management, and that those from most other countries trade Saudi equities through swap agreements.
“This draft aligns with the CMA’s gradual approach to opening the market, building on previous phases and paving the way for complementary steps aimed at further liberalising the capital market,” the regulator said.
The statement didn’t include any proposed changes to rules that limit foreign investors to owning a 49% stake in Saudi companies, and the regulator said in an interview last month that those adjustments are expected in the coming months.
The Capital Market Authority known as CMA is seeking feedback on a draft law that would open the main market to all categories of non-resident investors, it said in a statement on its website on Wednesday.
Current rules stipulate that foreigners must meet certain qualifications, such as having at least $500mn in assets under management, and that those from most other countries trade Saudi equities through swap agreements.
“This draft aligns with the CMA’s gradual approach to opening the market, building on previous phases and paving the way for complementary steps aimed at further liberalising the capital market,” the regulator said.
The statement didn’t include any proposed changes to rules that limit foreign investors to owning a 49% stake in Saudi companies, and the regulator said in an interview last month that those adjustments are expected in the coming months.
The latest move could complement those, which analysts say would attract more flows to the Saudi market from passive and active fund managers.
That’s in line with the objectives of the kingdom’s efforts to fully open equities to foreign investors and develop robust financial markets as part of its broader economic diversification agenda.
Regulators are also looking to revive the stock market. Saudi benchmark Tadawul All Share Index pared its year-to-date loss to about 4% after a rally last week, but is still underperforming major emerging-market peer.
The need for foreign inflows is becoming increasingly pronounced as high spending and low oil revenues drive the government into deeper budget deficits, threatening to slow investment in the economy.
A move to completely remove so-called QFI restrictions would be among the latest in a rush of market reforms taken by Saudi Arabia, including giving foreign firms the option to launch depositary receipts and easing rules for funds and asset managers dealing in Saudi equities.
Regulators are also looking to revive the stock market. Saudi benchmark Tadawul All Share Index pared its year-to-date loss to about 4% after a rally last week, but is still underperforming major emerging-market peer.
The need for foreign inflows is becoming increasingly pronounced as high spending and low oil revenues drive the government into deeper budget deficits, threatening to slow investment in the economy.
A move to completely remove so-called QFI restrictions would be among the latest in a rush of market reforms taken by Saudi Arabia, including giving foreign firms the option to launch depositary receipts and easing rules for funds and asset managers dealing in Saudi equities.
Source: GULF TIMES