CMA nods to new regs for SPACs’ Nomu offering

The Capital Market Authority's (CMA) board approved the new regulatory framework for the offering of Special Purpose Acquisition Companies (SPACs) in the Nomu-Parallel Market.

This is through amendments to the implementing regulations of the Companies Law for Listed Joint Stock Companies, the rules on the offer of securities and continuing obligations, and the glossary of defined terms used in the CMA regulations and rules, to be effective from the date of its publication.

According to the regulator’s statement today, April 2, the amendments aim to diversify the available investment products and encourage private sector companies to pursue listing, thereby contributing to meeting financing needs, increasing the number of offerings, and enhancing liquidity levels in Nomu. The amendments also provide investors with an opportunity to access non-listed companies that were previously difficult to invest in directly.

Moreover, the amendments include regulating the conditions and requirements for the registration and offering of shares of SPACs in Nomu. Among the key requirements are that the company must be established by a sponsor and that its shares must be redeemable at the option of shareholders.

Furthermore, the amendments grant shareholders the right to redeem their redeemable shares, including redemption for a cash amount from the escrow account in proportion to their shareholding in the SPAC, in specific cases, including where the SPAC completes a transaction with a target company and the shareholder votes against approving such transaction.

The amendments also require that the company's capital following the offering shall not be less than SAR 100 million, thereby supporting the enhancement of efficiency and attractiveness of Nomu to investors.

The amendments also set out the conditions for completing an acquisition or merger transaction between a SPAC and the target company, in a manner that enhances governance and protects investors' rights. These conditions include that the sponsor, or an investment fund managed by the sponsor, must not hold, directly or indirectly, any shares or ownership interests in the target company, and that the value of the target company must represent at least 80% of the amounts deposited in the escrow account. In addition, the shareholding of the SPAC's shareholders in the target company following completion of the transaction must not be less than 30%.

From a timeline perspective, the amendments require a SPAC to complete the transaction within a period not exceeding 24 months from the date of its listing on Nomu, with the possibility of an extension for an additional 12 months subject to the approval of the extraordinary general assembly. The sponsor and its affiliates may not participate in voting on the extension resolution, and the CMA must be notified accordingly.

The approval of the new regulatory framework comes as a continuation of the CMA's regulatory efforts to enhance the diversity of investment products and expand the investor base in the Saudi capital market, in addition to providing financing instruments that support economic growth, the statement added.

In April 2025, CMA called upon relevant and interested players to share their feedback on a draft bill to introduce SPACs in the Nomu-Parallel Market. The consultation period lasted on “Istitlaa” platform for 30 calendar days, ending on May 8, according to Argaam’s data.

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