In a significant move to attract greater foreign investment, Saudi Arabia’s Capital Markets Authority (CMA) has announced it will open its financial markets to all foreign investors starting February 1st. The decision is set to liberalize access to the Saudi stock exchange and boost market liquidity.
The amendments approved by the regulator will eliminate the concept of the Qualified Foreign Investor (QFI), a rule that previously limited direct market access to a specific category of international institutional investors.
A Strategic Move to Enhance Liquidity
The landmark decision will allow investors from around the world to invest directly in the Kingdom’s capital market without the previous restrictions. In a statement, the CMA highlighted that the policy shift is designed to support capital inflows and significantly improve market liquidity.
This change is expected to make the Saudi market more attractive and accessible to a wider range of global funds and individual investors, simplifying the investment process and deepening the capital pool.
Part of a Broader Economic Vision
This liberalization is a key component of Saudi Arabia’s broader economic strategy to reduce its dependence on oil revenues. The Kingdom has been actively implementing reforms to attract foreign capital and diversify its economy.
Recent initiatives include establishing exchange-traded funds with partners in Japan and Hong Kong and allowing foreigners to invest in listed firms that own real estate in the holy cities of Mecca and Medina. According to the CMA, international investors held 590 billion riyals ($157 billion) in the Saudi capital market at the end of the third quarter of last year.
About The Capital Markets Authority
The Capital Market Authority (CMA) is the sole regulator and supervisor of the capital market in the Kingdom of Saudi Arabia. It enjoys financial and administrative independence and reports directly to the Prime Minister. Its primary functions are to regulate and develop the Saudi Arabian Capital Market by issuing the required rules and regulations for implementing the provisions of the Capital Market Law.
Source: Zawya
