Saudi Market Poised for Historic Shift as Tadawul Pursues Opening to Foreign Investors
In a bold step aimed at fostering liquidity and attracting global capital, Saudi Arabia’s Capital Market Authority (CMA) has opened a public consultation on landmark reforms that would open Tadawul to foreign investors, according to Gulf News.
The CMA has published the draft amendments on the Public Consultation Platform Istitlaa, to collect feedback from the public and government entities on proposed laws and regulations.
Crucially, the draft plan proposes eliminating foreign investor restrictions, ending swap agreements, and granting direct access to Saudi equities.
Currently, overseas investors are required to register as “foreign institutional investors.
Under the new plan, however, this requirement would be abolished, opening the door to unrestricted direct participation in the Saudi market.
Moreover, foreign investors would have full access to direct ownership of Saudi-listed stocks after removing the use of swap agreements.
A CMA board member told Bloomberg last week that foreigners could be allowed majority ownership of listed companies before the end of the year.
This means that restrictions that had previously limited them to minority stakes would be lifted.
The Saudi Capital Market Authority noted that these sweeping reforms seek to strengthen market liquidity, draw greater inflows of international capital, and expand overall market depth.
At the same time, the authorities described the consultation as an integral part of a phased strategy to liberalize the financial sector and make the Saudi market more competitive and appealing to global investors.
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