CMA proposes easing investor criteria for Nomu to boost participation, liquidity

27/03/2025 04:40 AST

Saudi Arabia's Capital Market Authority has proposed easing investor criteria for Nomu, the Kingdom's parallel market, aiming to expand participation and improve liquidity.

The proposed amendments suggest reducing the minimum transaction requirement for individual investors from SR40 million ($8 million) to SR30 million over a 12-month period.

Additionally, the requirement for quarterly trading activity would be eliminated. Under the new regulations, board and committee members of companies listed on Nomu would also be eligible to qualify as investors.

The project aims to reserve the term "Qualified Investor in the Parallel Market" for eligible categories, amend the minimum transaction value required for classifying a natural person as a qualified investor, and rank board members and committee members of listed companies as suitable to invest.

Saudi Arabia accounted for 31 percent of the region's total initial public offering proceeds in 2024, making it the second-largest contributor after the UAE. The Saudi Exchange, Tadawul, witnessed 14 IPOs on its main market, collectively raising $3.8 billion. Nomu also saw 28 IPOs, generating $297 million.

The CMA called upon relevant and interested persons participating in the capital market to share their feedback on the draft for 30 days, ending on April 28.

Earlier in March, the CMA called for feedback on the draft "Regulatory Framework for Debt Instruments Offering Platforms and Investing in Them," which aims to develop debt instrument offerings by licensed capital market institutions for securities crowdfunding.

With the consultation period to end on April 23, the draft outlines regulatory and licensing requirements for offering and investing in debt instruments, aligning with developments in the capital market.

Key proposals include allowing organizations to present debt instruments in the sukuk and debt market and enabling companies with a FinTech Experimental Permit to obtain the necessary license to operate as capital market institutions.

Organizations will need an arranging license to offer debt instruments through crowdfunding platforms. The draft also introduces requirements for safeguarding client funds and registrable functions for licensed establishments.

The proposal aims to expand the role of capital market institutions in financial technology, enhance the debt market, and increase participation in securities crowdfunding, supporting the CMA's objectives.

Arab News