Riyadh – Mubasher: The Saudi Capital Market Authority (CMA) has initiated a public consultation process aimed at a comprehensive development of securities business activities within Saudi Arabia, according to an official statement.
The proposed regulatory draft seeks to enhance market efficiency by facilitating licensing procedures, adjusting minimum capital requirements for various financial activities, and modernizing information technology and compliance frameworks in alignment with international best practices.
A significant portion of the draft focuses on recalibrating minimum capital requirements to better reflect the underlying risks of specific securities activities.
Meanwhile, the minimum capital for custody activities is proposed to be reduced to SAR 20 million, down from the current SAR 50 million.
Additionally, the CMA introduced a specific capital threshold of SAR 2 million for arranging activities that involve holding client funds in the context of securities-based crowdfunding. This targeted requirement is designed to be proportionate to the specific operational risks associated with crowdfunding platforms.
Furthermore, the Saudi regulator called for feedback from market participants, government entities, and the private sector regarding a series of proposed amendments to the Capital Market Institutions Regulations and the Securities Business Regulations.
The consultation period is set to run for 30 calendar days, concluding on 17 June 2026. The initiative is part of a broader effort to refine the regulatory environment and reduce administrative burdens on financial institutions operating within the Saudi capital market.
The draft also introduces a restructured classification for dealing activities, while the CMA proposes grouping dealing as principal, underwriting, and executing transactions on a margin basis under a single category with a minimum capital requirement of SAR 20 million.
Conversely, dealing as an agent would be treated as a separate sub-activity with a lower capital requirement of SAR 10 million.
Under the proposed amendments, the CMA aims to simplify the process for obtaining licenses and commencing business operations.
Key changes include the removal of requirements for certain documents and information previously mandatory during the application phase, such as the formal Terms of Business.
The CMA also plans to update Know Your Client (KYC) protocols by directly linking them to a customer’s risk classification regarding money laundering and terrorism financing. This will be supported by the introduction of designated standardized forms to ensure industry-wide consistency in compliance.
The proposed reforms come at a time of significant expansion for the Saudi financial sector. Data provided by the CMA indicates that the number of capital market institutions has more than doubled over the past eight years, growing to 215 by the fourth quarter (Q4) of 2025 from 86 institutions in 2017. This increase underscores the necessity of an evolving regulatory framework that can accommodate a larger and more diverse pool of market participants.
