Saudi IPO rule changes draw bank concerns: Bloomberg

The CMA set Oct. 22, 2026, as the deadline for feedback on the proposed IPO rules

Some banks have raised concerns over part of the Capital Market Authority’s (CMA) proposed amendments to IPO rules, particularly those related to underwriters’ obligations toward unsubscribed shares in an offering, Bloomberg reported, citing people familiar with the matter. 

Banks had raised concerns about proposals that could require an underwriter to purchase shares not subscribed for by investors.

According to the sources, these requirements could leave banks having to take up the entire offering if it is not fully subscribed, while some institutions may find it difficult to comply due to restrictions on their ability to own shares in companies.

Bloomberg noted that several banks, including international lenders active in Saudi Arabia’s IPO market, had submitted feedback to the CMA on the proposals.

It added that bankers broadly support efforts to improve the IPO process, but are concerned that the proposed underwriting requirements could reduce the number of institutions able to participate in offerings.

According to Argaam data, the CMA on Sept. 22 issued for public consultation a draft proposal to improve IPO practices. The proposal includes strengthening the underwriter’s role and responsibility in the offering process from the book-building stage by requiring the underwriting agreement to be signed and become effective before the start of book-building, with the underwriter’s commitment to purchase all offering shares becoming effective upon the commencement of the book-building process.

The proposed provisions also include verifying that participation orders submitted during book-building reflect the actual value of liquidity available to the investor, limiting financial solvency verification to cash or cash equivalents, and requiring the issuer to disclose forward-looking information, including financial performance indicators covering a period of at least one year.

The CMA set Oct. 22, 2026, as the deadline for submitting feedback on the proposal, with the proposed regulatory provisions set to take effect from Nov. 2, 2026, if approved.