ANNOUNCED AS TEMPORARYNo
Controls on commercial transactions and investment instruments
On 15 June 2015, the government of Saudi Arabia for the first time allowed foreigners gain direct access to the national stock exchange known as the Tadawul - primarily for accessing the listed shares in the stock exchange ( with restrictions being applied to IPOs and the listed shares of mining firms primarily). Before, the introduction of this liberalisation, foreign residents were able to only indirectly invest in listed shares in the Tadawul by entering into swap agreements with Authorized Persons (legal Saudi persons authorised to operate fully in the national capital market).
Nevertheless, it is relevant denoting that there will still be restrictions in terms of the profile of foreigners that will be able to now for the very first time access the Tadawaul exchange. Specifically, the primary profile of foreigners that will be able to access the Tadawul, will be Qualified Foreign Investors (QFIs) - i.e. legal persons (financial institutions) validated by the Saudi authorities that must operate for at least 5 years in the Saudi jurisdiction as well as hold minimum USD 5 billion in assets under management. However, QFIs cannot own more than 5% of the shares of a firm listed in the Tadawul.
The secondary profile of foreigners that will now for the first time be able to access the Tadawul are individual investors -- contingent upon them as well not owning more than 5% of individual companies listed in the Tadawul.
Lastly, both these profiles of foreigners cannot cumulatively own more than 20% of the shares of a listed firm in the Saudi stock exchange.
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