Saudi Central Bank issues new rules for debt crowdfunding

A $1.3mln minimum paid up capital limit has been set for the activities in the kingdom

  
Saudi Arabian currency. Image used for illustrative purpose.

Saudi Arabian currency. Image used for illustrative purpose.

Getty Images

The Saudi Central Bank (SAMA) has issued new rules for debt crowdfunding, in a bid to attract new investors and companies.

In a statement on its website, SAMA said the move was designed to attract new investors, companies and small and medium capital owners.

The bank said it was setting the minimum paid up capital for a facility wishing to obtain a licence for the activity at SAR 5 million ($1.3 million).

The central bank will have the authority to raise or reduce the minimum capital according to market conditions, the statement continued. 

The aim of the new rules is to regulate the provisions for licensing companies involved in debt crowdfunding, in accordance with the powers granted to the Saudi Central Bank under the provisions of the Finance Companies Control Law.

The statement concluded: “The issuance of these rules comes as part of SAMA’s efforts to support the opportunities for growth and economic development in the kingdom, in order to achieve the goals of the kingdom’s Vision 2030 by supporting and organising modern financing activities.”

The bank first announced draft rules for the regulating of debt crowdfunding activities in July 2020, and asked for feedback from interested business persons and legal entities.

(Reporting by Imogen Lillywhite ; editing by Seban Scaria)

 imogen.lillywhite@refinitiv.com

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2021

More From Financial Services