Overview

The Capital Market Authority (CMA) of Saudi Arabia has published a Draft Regulatory Framework for the Offshore Securities Business License for public consultation. This initiative is part of the CMA’s strategic plan (2024–2026) and aligns with the Financial Sector Development Program and Vision 2030, aiming to position the Kingdom as a global financial hub.

Purpose of the framework

The proposed framework introduces a new license allowing capital market institutions to conduct offshore securities business from within the Kingdom. It is designed to attract international and regional financial institutions, enhance market efficiency, and diversify the investor base.

Key Features of the Offshore License: 

  • Client base: Primarily foreign clients outside the Kingdom, with limited access to specific local entities (e.g., government bodies, local banks, insurance companies).
  • Permitted activities: Includes dealing in securities issued/listed outside the Kingdom, managing funds investing in local securities, and establishing flexible private investment funds.
  • Double-hatting: Permits shared personnel between affiliated institutions under certain conditions.
  • Dispute resolution: Allows parties to choose arbitration mechanisms and communication languages.

Regulatory Highlights: 

  • Lower regulatory burden: Streamlined requirements while maintaining AML/CFT standards.
  • Capital requirements: Must cover one year of expected expenses.
  • Legal form: Open to any legal form established in the Kingdom with a regional headquarters license.
  • Fit and proper criteria: Applies to institutions and key personnel.
  • Client protections: Includes fiduciary duties, suitability assessments, and robust systems for client money and asset segregation.

Consultation period

The CMA invites stakeholders to submit feedback within 30 calendar days from the publication date (noting that the submission deadline is 28 June 2025). The draft regulations and supporting documents are available on the CMA’s official website.

Next steps

Firms interested in applying for the Offshore Securities Business License or participating in the consultation should review the draft framework and submit comments promptly. For further guidance or assistance with submissions, please get in touch with Alain Sfeir or Atif Mulla.