Relaxes Ownership Limits for Foreign Investors

As part of the Kingdom of Saudi Arabia's efforts to regulate and develop the capital markets and to facilitate foreign investment, the Capital Market Authority (CMA) has approved the Instructions for Foreign Strategic Investors' Ownership in Listed Companies (the FSI Instructions). They came into effect on 26 June 2019. The FSI Instructions have removed the existing limit on foreign ownership of a Saudi-listed company for foreign strategic investors (FSIs). Under the new regulations, foreign ownership of stocks will no longer be limited to qualified foreign investors (QFIs) (i.e. financial firms with at least US$500 million in assets under management); FSIs can acquire stakes in listed companies by either buying the shares directly on the market or through private transactions and initial public offerings. The new regulations have also done away with any minimum or maximum ownership limits for strategic investors - the only restriction being that investors must hold their shares for at least two years before they can sell.

• Type:

  • Entry and establishment (Ownership and control)

• Industry:

  • Not industry specific

• Sources:

  • Capital Market Authority, Instructions for the Foreign Strategic Investors Ownership in Listed Companies, https://cma.org.sa/en/RulesRegulations/Regulations/Documents/Instructions-FSI-Ownership-Listed-Companies-en.pdf, 26 Jun 2019
  • Capital Market Authority, The CMA Approves the Instructions for the Foreign Strategic Investors' Ownership in Listed Companies, https://cma.org.sa/en/MediaCenter/PR/Pages/Foreign-Strategic-Investor.aspx, 26 Jun 2019
  • Lexology, Saudi Capital Market Authority Announces New Instructions for Foreign Strategic Investors’ Ownership in Listed Companies, https://www.lexology.com/library/detail.aspx?g=412c3b73-2b5d-499b-9f2b-aa4f0446ed35, 16 Aug 2019