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Logo of Capital Market Authority (CMA)
The Capital Market Authority (CMA) called upon relevant and interested persons participating in the capital market to share their feedback on the draft regulatory framework for the offshore securities business license.
The consultation period will last for 30 calendar days, ending on June 28, 2025, the regulator said, in a statement.
The proposed draft aims to enhance the Kingdom's position as a regional and global financial hub for securities by enabling local capital market institutions and attracting a number of international capital institutions. This will be implemented by granting the institutions an Offshore Securities Business License through their regional headquarters licensed by the Ministry of Investment and by adopting the regulatory framework for this activity.
According to the proposed draft, CMA will allow capital market institutions, both local and international, to apply for an Offshore Securities Business License, provided they obtain a regional headquarters license from the Ministry of Investment. This Offshore Securities Business License will enable such institutions to conduct securities activities outside the Kingdom, as well as manage funds investing in securities within the Kingdom. These services may be offered to foreign clients abroad, in addition to a specified category of local clients.
The draft also includes a package of facilitations for the obtainment of offshore securities business license. These include eased requirements related to legal structure, minimum paid-up capital, registration of required positions, financial adequacy obligations, and other relevant conditions, aligned with leading international standards and global best practices suitable for the Saudi capital market.
According to the CMA, it also aims to enable holders of the Offshore Securities Business License to establish investment funds in the Kingdom with flexible structures through its strategic initiative "Enabling the Establishment of More Flexible Fund Structures". It also aims to enhance investment opportunities in regional financial markets and expand the client base by allowing engagement with sovereign wealth funds and pension funds in the Kingdom.
Furthermore, a legal entity affiliated with a local capital market institution and holds a Ministry of Investment license will also be eligible to apply for the Offshore Securities Business License.
The proposed draft will contribute to diversifying the investor base associated with capital market institutions, in addition to enhancing the volume of assets under management in the Saudi capital market, positively impacting the attractiveness of the local market.
The proposal to grant the license aligns with efforts to develop the financial sector and complements the Regional Headquarters Program as it pertains to financial institutions offering securities services. This initiative is expected to help attract knowledge and facilitate the transfer of expertise within the securities sector.
The license will be subject to the Kingdom’s laws and regulations, including the Capital Market Law and its executive regulations. This is in accordance with the specific regulatory framework defined in the relevant regulations based on the scope of securities business conducted. The license will be subject to fewer regulations than those currently in effect.
The regulator also emphasized that the comments of relevant and interested persons shall be taken into full consideration for the purpose of approving the final Proposed Amendments. This shall contribute to the aim of enhancing and developing the regulatory environment.
The Draft can be viewed via the following links:
The Draft Regulatory Framework for the Offshore Securities Business License
Introductory Document - Offshore securities business license
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