DUBAI--Saudi Arabia's regulator on Thursday issued a set of
draft rules for foreigners ahead of the long-awaited opening of its
$580 billion stock market to international investors next year.
The Capital Markets Authority said a qualified foreign investor
must be a bank, brokerage, fund manager or insurance company with
at least $5 billion in assets under management, a requirement aimed
at attracting more stable and experienced institutional
investors.
The draft rules set a 5% ownership limit for any individual
investor in a single listed company and a collective 20% ceiling
for qualified foreign investors.
"The maximum proportion of the issued share of any particular
issuer whose shares are listed that may be owned by all foreign
investors (in all categories, whether residents or non-residents)
in aggregate is 49%, including interests under swaps," the CMA
said.
A final version of the rules is expected to be published after a
three-month consultation period with banks, government officials
and other market participants.
Saudi Arabia, the biggest economy in the Arab world, is one of
the last large international markets to remain largely off-limits
to foreign investors. In 2008, the kingdom began allowing foreign
investors indirect access to the market through swaps, but it has
hesitated to open the market fully.
But last month, the regulator said it was working on rules to
lift those restrictions, potentially paving the way to draw in
hundreds of millions of dollars.
Foreign investors have been waiting eagerly for more access to
the region's biggest and most liquid market, especially after two
much smaller peers, Qatar and the United Arab Emirates, were
embraced by index compiler MSCI Inc. in May. Inclusion of a
country's stocks in MSCI's indexes almost automatically draws in
funds from investors who track the benchmarks.
Saudi Arabia's stocks are worth more than the other three open
regional emerging markets--Egypt, Qatar and the U.A.E.--put
together.
Write to Nicolas Parasie at nicolas.parasie@wsj.com
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