Saudi CMA proposes new rules to enhance disclosure requirements

Arab News

10-04-2025

RIYADH: Saudi Arabia plans to enhance disclosure requirements for various share classes as part of a proposed regulatory overhaul to boost transparency and broaden funding options in the Kingdom's capital markets.
The Capital Market Authority has opened a 30-day public consultation, starting April 9, on a draft framework that introduces stricter reporting rules for traditional, redeemable, and convertible share classes.
Under the draft rules, listed companies would be allowed to increase their capital through the registration and offering of new types or classes of shares not previously listed on the market. It also includes provisions for raising capital, offering issuers greater flexibility in their financing strategies.
According to a statement, the proposed amendments include an update to ownership disclosure thresholds. The new rules would require any person holding or having an interest in 5 percent or more of a company's voting rights — rather than total shares, as currently mandated — to notify the exchange.
The move is part of the CMA's strategy to support capital formation, facilitate fundraising for companies, and improve the overall regulatory environment.
In a post on X, the authority said the new proposals were made 'with the aim of enhancing the capital market's role in capital formation.'
The draft framework builds on the Companies Law, which allows firms to issue different classes of shares with specific rights and privileges, as well as its implementing regulations for listed joint-stock companies.
Earlier this week, the CMA launched a public consultation on allowing special purpose acquisition companies to list on the parallel market, Nomu, as part of efforts to boost private sector participation.
The proposed regulatory framework would permit SPACs to be formed as joint stock companies under the Companies Law, with the primary goal of acquiring or merging with unlisted Saudi firms, in line with the Rules on the Offer of Securities and Continuing Obligations.
In March, the CMA proposed amendments to expand the range of eligible issuers and align regulations for Special Purpose Entities.
SPEs, established and licensed by the CMA, are independent financial and legal entities created for specific financing purposes, and are dissolved once their objectives are fulfilled.
This initiative aims to strengthen the sukuk and debt instruments market, supporting the continued growth of the Kingdom's asset management industry.