CMA ratifies amended SPEs rulebook to ease governance

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The Capital Market Authority's (CMA) board of directors ratified a set of amendments aimed at easing the governance of special purpose entities (SPEs) and streamlining their regulatory procedures.

These changes took effect as of their publication date, with a grace period granted for compliance with some newly-approved provisions, the Saudi regulator said in a statement today, Sept. 8.

This should enhance the attractiveness of SPEs as a legal entity designed to issue debt instruments and investment units. This is by facilitating procedures governing the establishment of SPEs and enabling securitization transactions through them, thereby contributing to the development of the Saudi Sukuk/Bonds Market, while also lifting the local asset management industry.

These changes are bound to reflect positively on market liquidity and create new investment opportunities.

Among the key enhancements introduced under the new rulebook was the broader base of issuers with respect to the legal structure of the SPE sponsor, without violating the laws and regulations governing its specific activities. Moreover, SPEs are now permitted to issue debt instruments through an exempt offering besides the currently available options of public and private offerings.

Furthermore, the amendments enable SPEs to carry out securitization transactions by adding a dedicated chapter on the originator in securitization operations to the Rules for Special Purposes Entities.

The scope of the amended rulebook also included clarifying the authorities of board members of entities issuing debt instruments, as well as the authorities of the investment fund manager when the fund is structured as a SPE under the articles of the by-laws, CMA stated.

This is in addition to lifting the governance of SPEs, including assigning the trustee the responsibility of representing the interests of debt instrument holders and developing the provisions related to their dismissal. A mandate on the independence of board members of the entity from both the sponsor and the originator was also introduced and procedures for dissolving the SPE.

SPEs licensed prior to the publication date of the amended rules must submit their new by-laws to the CMA in accordance with the updated and approved template available on the Forms page of the CMA's official website, within a period not exceeding 180 days from the date of this announcement. These entities are granted a 90-day grace period to comply with paragraphs (b) and (c) of Article 20 of these rules.

The number of licensed SPEs recorded significant growth by mid-2025, reaching a total of 1,239 entities, an increase of 87.2% compared to mid-2024.

This uptrend was attributed to the expansion of FinTech companies authorized to offer debt instrument offerings under the FinTech Lab framework, in addition to the growing interest from small and medium-sized enterprises in leveraging these instruments as effective and alternative financing channels.

This follows the CMA's publication of the “Draft to Enhance the Governance of Special Purpose Entities and Facilitate Their Procedures" on the Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform) affiliated to the National Competitiveness Center and the CMA's website for public consultation for a period of (30) calendar days.

The amended Rules for Special Purposes Entities and the Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority can be accessed through the following links:

Amended Rules for Special Purposes Entities

The Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority​