Saudi Arabia plans to further open up its capital market to foreign investors, with its capital market regulator proposing a host of measures to simplify requirements for qualified foreign investors (QFIs) and adding new channels for overseas retail investors in the country’s bourses.
Under the new draft rules framed by the Saudi Capital Market Authority (CMA), QFIs will be required to open only an investment account in accordance with the Investment Accounts Instructions, instead of the existing mandatory requirements of applications for qualification and assessment agreements.
The draft rules also waive the requirement of stipulated sizes for assets under management for some classes of QFIs.
The regulator also proposed adding a new channel for foreign investment in the listed securities on Saudi bourses by allowing all foreign natural and legal persons to invest through discretionary portfolios managed by the capital market institutions.
It also proposed framing new guidelines for investments by non-resident foreign investors in listed securities through swap agreements.
The draft rule proposed removing the requirement on the duration of such swap agreements, as well as removing the requirement to notify the CMA prior to entering into a swap agreement.
The draft rules were released for public consultation on Wednesday.
The public consultation will be open for a 30-day period, ending on January 9, 2023.
The latest proposals are expected to have a positive impact on encouraging foreign investment in the Saudi capital market, besides increasing its attractiveness and efficiency and enhancing its regional and international competitiveness.
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