Saudi Equities now open to all foreign investors

Scope of access

The Capital Market Authority (CMA) has released for consultation a draft framework that would allow all foreign investors, both natural persons and legal entities, resident and non-resident, to invest directly in shares listed on the Main Market, and to invest in debt instruments and units of investment funds.

It would retire the Qualified Foreign Investor (QFI) and swap agreement regimes and streamline related rules so that access to Saudi listed markets operates on a simpler, more globally familiar footing.

Ownership limits and safeguards

Core safeguards remain. The CMA retains existing foreign ownership parameters, including the aggregate cap on foreign investors (with foreign strategic investors separately tracked) and the two year lock up for foreign strategic investors. In addition, a non resident foreign investor (other than a foreign strategic investor) may not own 10% or more of an issuer’s listed shares or its convertible debt.

Practical mechanics and transparency

The draft also addresses key practicalities: foreign investors holding listed debt could not convert into listed shares unless otherwise eligible to hold those shares directly; the Exchange would publish up to date statistics on foreign ownership headroom, the ownership percentage of foreign strategic investors, and any restrictions arising from company constitutions or competent authority instructions; and the investment restriction article would not apply to investments in the shares of foreign issuers listed on the Main Market.

Consequential amendments

Consequential updates across the rulebook reflect the end of the QFI and swap pathways. In the Glossary, the QFI limb is removed from the “Counterparty” definition. In the Investment Accounts Instructions, the express account opening route for swaps and the QFI specific provisions are deleted, and the outbound transfer exception for QFIs is removed to align with the general transfer rules. In the Instructions on Issuing Depositary Receipts Outside the Kingdom, the condition limiting cancellation of depositary receipts to holders within specified investor categories is deleted, provided the holder maintains the requisite accounts.

The consultation runs for 30 days from the CMA’s publication date; firms should treat any stated calendar date as the launch date of the consultation and confirm against the CMA’s notice.

What this means for market participants

Taken together, these proposals would significantly simplify foreign access to Saudi listed markets, enhance transparency around foreign ownership limits, and better align operational processes with international practice, while preserving targeted controls where the CMA considers them necessary.

How we can help

At Ashurst, we are closely following the consultation and advising clients on the implications for capital markets access, foreign ownership limits, and related structuring.

We welcome a discussion on what these changes could mean for your Saudi market plans.

Other Authors: Rayan AlMadani, Associate; Majed Alsaggaf, Trainee Associate