CMA Chairman: Leadership directs focus on fairness, market challenges

The Capital Market Authority’s (CMA) Chairman Mazen Al-Sudairi said directives from King Salman bin Abdulaziz and Crown Prince Mohammed bin Salman underscore the importance of ensuring fairness and addressing challenges facing the market.

The structural developments in the market over the past two years have necessitated several reforms, he added.

In an interview with Al Arabiya TV, Al-Sudairi said CMA would take all necessary steps to strengthen confidence in the market. He said the goal is to build a market that accurately reflects the economy, serves as a destination for citizens’ savings, and is capable of attracting foreign investment and successful IPOs. He stressed that all market participants should work together, while CMA’s role is that of a regulator rather than a source of concern.

He said the market has undergone structural changes in recent years, requiring the development of regulations and procedures to achieve balance and protect the rights of all parties.

Restructuring IPO Responsibilities

As for initial public offerings, Al-Sudairi said CMA is working to redefine the responsibilities of parties involved in the offering process in a way that enhances the quality of IPOs and increases accountability among the relevant parties.

He noted that CMA has reviewed and investigated a number of previous IPOs with the aim of drawing lessons from them and addressing areas requiring improvement.

Al-Sudairi also stressed that CMA seeks to restore and strengthen confidence in the IPO market and will tighten or ease certain requirements depending on the nature of each offering, in order to achieve the appropriate balance and reassure investors that an IPO is meeting its intended objective.

He said the aim is not to impose stricter regulations for their own sake, but rather to establish a regulatory framework that strikes a balance, protects investors, and enhances companies’ ability to access the market.

Increasing Retail Participation in IPOs

Al-Sudairi said the share allocated to retail investors in public offerings should rise to around 30%, as part of efforts to increase participation by different categories of investors in the market.

He explained that greater participation by retail and institutional investors is an important factor in deepening the market and improving its efficiency.

The regulator seeks to create a more balanced market capable of accommodating different investor segments while maintaining IPO quality and ensuring fairness in the allocation process, according to the chairman.

Algorithmic Trading

Regarding algorithmic trading, Al-Sudairi said the majority of foreign financial institutions use algorithms in their trading operations.

He highlighted the importance of having regulations that keep pace with the market’s development while maintaining its efficiency and fair dealing.

Al-Sudairi further stressed that technological advances in trading methods require continuous regulatory adaptation to strike a balance between benefiting from modern technologies and protecting the market and its participants.

Short Selling

The CMA chairman also said short selling is beneficial to the market provided it is not used in a negative manner.

There are indications that some short-selling practices may currently have a negative impact, Al-Sudairi said, noting that CMA has already begun regulating securities lending and is currently working to complete the regulatory framework governing the activity.

He stressed that CMA is studying new rules for short selling aimed at balancing market efficiency with investor protection.

Foreign Ownership Limit

As for the 49% maximum foreign ownership in companies, Al-Sudairi said the ratio is under review and that CMA is working on the matter in coordination with sector regulators to reach agreed-upon levels, so that the authority does not set a specific limit and subsequently have to reverse it.

He stressed the importance of regulations that keep pace with the market’s development while maintaining its efficiency and fair dealing.

Board Governance

As regards board remuneration, Al-Sudairi stressed that CMA’s role is not to set caps on board compensation, but rather to put companies back on track and improve the efficiency and effectiveness of boards of directors and management. In this context, he said CMA has emphasized legislation related to board governance, noting that the authority’s role as a regulator is to enable.

Enabling shareholders’ general assemblies to operate more effectively is part of this role. To this end, CMA moved to introduce earnings calls to give investors greater visibility into what is happening within companies. Listed companies have been required to hold such calls twice a year, a key global practice that allows investors to understand performance in greater detail and attend general assemblies with sufficient information, according to Al-Sudairi.

These discussions also help domestic and international active funds gain a better understanding of companies and attract them, alongside retail investors, thereby supporting some companies in outperforming the market, he added.

Saudi Investors’ Overseas Trading

Regarding overseas investment, the CMA chairman stressed that the authority has not interfered with investment choices abroad and does not exercise oversight over such decisions. He said CMA’s role is to protect investors, adding that the requirements imposed on overseas trading are the same as those applied domestically and are aimed at protecting investors, particularly in highly volatile commodities.

Al-Sudairi denied that these measures were intended to protect domestic liquidity, saying that protecting local liquidity comes through competitiveness, enhancing the market’s attractiveness and strengthening confidence, which CMA will work to achieve.

Strengthening Market Confidence

Al-Sudairi stressed that CMA would take all necessary steps to strengthen confidence in the financial market, noting that confidence is a key element in developing the market and increasing investor participation.

The regulator aims to increase participation by retail and institutional investors while enhancing the market’s ability to attract foreign investment, he added.

The top official also explained that the financial market should serve as a true reflection of the Saudi economy and reflect the development of companies and economic sectors in the Kingdom.

He also highlighted the importance of making the market an attractive destination for citizens’ savings and providing suitable investment opportunities, while simultaneously attracting foreign investors and successful IPOs.

Regulatory Reforms

Al-Sudairi noted that the changes witnessed by the market over the past two years have created a need for regulatory reforms and amendments, stressing that the regulator is monitoring developments and working to address challenges in a way that serves the market and investors.

He stressed that CMA’s approach is based on ensuring fairness, addressing challenges, and improving market efficiency, thereby strengthening its role in the economy and increasing its attractiveness to domestic and foreign investors.

According to Argaam’s data, a royal decree was issued on August 13, 2026, appointing Mazen Al-Sudairi as CMA Chairman, with the rank of minister, succeeding Mohammed El-Kuwaiz. He became the sixth person to head the authority’s board.

Since Al-Sudairi’s appointment, the market regulator has put forward several draft regulations for public consultation, including a proposal to improve IPO practices, draft restrictions on algorithmic trading, a proposal governing the conduct of securities business in financial markets outside Saudi Arabia, and draft regulations governing earnings calls.