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The Saudi Stock Exchange (Tadawul) has launched new regulations that will enable investors to have easier access to a broader range of foreign-listed businesses.
The local bourse confirmed on Monday that the Capital Market Authority (CMA) has approved the regulatory framework for the offering of Saudi Depositary Receipts (SDR), a move that is expected to deepen the Saudi market and diversify investment opportunities.
The framework permits the issuance and trading of SDRs, which represent shares of companies that are already listed on stock exchanges outside Saudi Arabia.
Companies who wish to trade SDRs will now follow the requirements for registering and offering shares currently in place under the Rules on the Offer of Securities and Continuing Obligations.
Issuers will also be subject to the same continuing obligations applicable to a foreign company that lists its shares on the Main Market under the Listing Rules, subject to certain exceptions.
The regulatory framework, which underwent a public consultation, builds upon the CMA's move in 2020 that allowed companies listed on the local capital market to issue certificates of deposit outside Saudi Arabia in exchange for their shares traded in the kingdom's capital market.
"This move aims to strengthen the pillars of Saudi Vision 2030, which seeks to make the Saudi capital market attractive to both local and foreign investors," the bourse said.
"Consequently, it is now allowed to offer depositary receipts to foreign companies in exchange for the issued shares in a foreign market."
(Writing by Cleofe Maceda; editing by Seban Scaria)
