CMA seeks public feedback on facilitating procedures for opening investment accounts

Logo of The 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 facilitating the procedures for opening investment accounts for various categories of investors within the project “Amendments of the Investment Accounts Instructions and the Rules for Foreign Investment in Securities and the Capital Market Institutions Regulations” for a period of 30 calendar days ending on Dec. 20, 2024.

According to the regulator’s statement, the proposed draft aims to align with the regulatory and technological developments in the Kingdom of Saudi Arabia and facilitate investment in the Saudi capital market by improving the procedures for opening investment accounts, including new categories of investors, and regulating the operations related to these accounts. This will enhance the attractiveness of the Saudi capital market for both local and international investors, increase the level of investor protection, and strengthen the confidence of market participants.

The key elements of the proposed draft include developing the requirements for opening an investment account for individual foreign investors residing in one of the GCC countries and expanding the types of securities they can directly invest in, including shares listed on the Main Market. Currently, their participation is limited to the debt market, the Nomu-Parallel Market, investment funds, and the derivatives market, while their ability to trade in the Main Market is limited to swap agreements as ultimate beneficiaries through capital market institutions or as clients of these institutions, where investment decisions are made on their behalf. The proposal introduces a new category of investors to the shares listed on the Main Market, offering them a direct channel to invest in the Saudi capital market. This change is expected to attract more foreign investments, enhance market liquidity, and contribute to supporting the local economy.

The proposed amendments also allow individual foreign investors who previously resided in Saudi Arabia or one of the GCC countries to continue operating their investment accounts and invest in shares listed in the Main Market even after their residency has ended and they return to their home country, provided they have previously opened an investment account in Saudi Arabia.

Furthermore, the proposed project includes amendments aimed at facilitating the procedures for opening and operating investment accounts for various categories of capital market institution clients. At the local investor level, the amendments aim to simplify the requirements for opening investment accounts for endowments, the statement added.