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Saudi Arabia: new Capital Market Authority rules on foreign institutional investors – effective

On 10 August 2016, the Saudi Capital Market Authority (CMA) approved the final draft for the new rules on qualified foreign institutional investment in listed securities.

The new rules are effective as from 4 September 2016. An initial draft had been published for public comments in 2014.

The major amendments introduced under the new rules are set out below.

  • The minimum value of managed assets required to qualify as a foreign institutional investor is significantly decreased from SAR18,750,000,000 to SAR3,750,000,000
  • The maximum participating interest in a listed company for a qualified foreign investor is increased from 5% to 10%
  • The concept of qualified foreign investor includes governments and government-related entities
  • The maximum proportion of shares (or convertible debt instrument) of any listed company that may be owned by all foreign investors combined (in all categories, whether residents or nonresidents) is 49%

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