SAUDI ARABIA: The Saudi Capital Market Authority (CMA)’s board has approved a significant set of regulatory enhancements for the Kingdom’s Sukuk and debt instruments market, marking the largest reform since the launch of the market.
The new measures, encompassing amendments to the Rules on the Offer of Securities and Continuing Obligations, specifically simplify the requirements for issuing debt instruments. A notable amendment allows the country’s development funds, development banks and sovereign funds to issue debt under an exempt offering category, providing these entities greater flexibility to meet their financing needs. The move aligns with Saudi Arabia’s Vision 2030 objectives, which prioritize national development and economic diversification.
Another regulatory enhancement streamlines the prospectus requirements across public, private and exempted offerings, reducing required supporting documents by over 50%. This restructuring also establishes a dedicated section for public offering regulations, which maintains essential investor protections through comprehensive disclosures.
For private offerings the regulator has eliminated the need for issuers to wait before launching an offering. Under the new rules, companies can now notify the CMA and immediately proceed, enhancing efficiency and accelerating issuers’ access to the Sukuk and debt market.
By easing requirements, the CMA hopes to attract diverse issuers, boost market activity and deepen the debt instruments market, which plays a crucial role in Saudi Arabia’s capital market growth.
The amendments followed a 30-day public consultation period, during which the proposed enhancements were open for feedback on the National Competitiveness Center’s Public Consultation Platform and the CMA’s website.
The Saudi Islamic capital market sees regular issuances from the corporate sector as well as notable issues from the government as part of an economic diversification drive. As of May 2024, the Kingdom accounted for 24% of global Sukuk issuances, second to Malaysia which held 40% of the market, according to Moody’s Investors Service.
