Saudi CMA to ease QFI access

Saudi CMA to ease QFI access

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The Saudi Arabian Capital Markets Authority (CMA) has approved new rules which lessen restrictions on share ownership as part of a series of amendments to its qualified foreign financial institutions (QFIs) investment rules.

Introduced in June 2015, the rules allow QFIs to invest in Saudi listed shares but with strict restrictions on the percentage of shares that could be owned by a foreign party.

In an effort to expand the pool of investing QFIs, each foreign investor will be allowed to own up to 10%, up from 5%, of the shares of a listed company, and foreign investors jointly will be permitted to own up to 49% of listed shares, up from 20%.

In addition, the CMA has lowered the barriers to entry by reducing the minimum value of assets under management required to qualify for the scheme to SAR3.75bn ($1bn) from SAR18.75bn.

It has also increased the number of foreign financial institutions that can qualify to include sovereign wealth funds, university endowments and various others.

The amended rules, along with an implementation date, will be published in full in mid-2017.

The CMA also announced that the 2017 update will coincide with a shift in the settlement cycle for listed shares from T+0 to T+2, and the introduction of securities lending and covered short-selling.


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