A) These rules aim to establish the procedures, requirements, and conditions necessary to determine the eligibility of foreign investors to invest in listed securities, and to define their obligations and the obligations of the licensed persons in this regard.

B) These rules do not violate the provisions of the law and its executive regulations, including the provisions contained in the rules for offering securities and continuous obligations, the market conduct regulation, the regulation of licensed persons, the merger and acquisition regulation, and the rules for combating money laundering and terrorist financing.

C) Without prejudice to what is stated in paragraph (E) of Article (15) of these rules, these rules do not apply to the citizens of the GCC countries.

D) Qualified foreign investors may exercise all rights associated with the listed securities they own, including trading in preemptive rights.

A) The term "Law" wherever it appears in these rules refers to the Capital Market Law issued by Royal Decree No. (M/30) dated 2/6/1424 H.

B) Without prejudice to paragraph (C) of this article, the words and phrases contained in these rules shall have the meanings defined in the Law, and in the glossary of terms used in the regulations and rules of the Capital Market Authority, unless the context of the text indicates otherwise.

C) For the purpose of applying the provisions of these rules, the words and phrases listed below shall have the meanings specified next to each of them unless the context of the text indicates otherwise:

• -Agreement for the Evaluation of Qualified Foreign Investor: An agreement between the licensed evaluator and the qualified foreign investor in accordance with the conditions stipulated in Article (10) of these rules.

• -Bank: A financial institution with a legal personality that conducts banking activities.

• -Licensed Evaluator: A licensed person who has agreed with the applicant to evaluate their application to be a qualified foreign investor, or the licensed person who is a party to the Agreement for the Evaluation of the Qualified Foreign Investor.

• -Insurance Company: A financial institution with a legal personality that conducts insurance activities.

• -Brokerage and Securities Company: A financial institution with a legal personality that conducts securities activities, including portfolio managers.

• -Investment Fund: Refers to any of the following legal entities:

  • 1) A pension fund whose main objective is to collect fees or periodic contributions from its participants or for their benefit; for the purpose of compensating them according to a specified mechanism.

  • 2) A endowment fund whose main objective is to provide grants to organizations, institutions, or individuals for scientific, educational, and cultural purposes, including university endowment funds.

  • 3) A mutual investment program aimed at providing investors the opportunity to collectively participate in the profits of the program.

• -License Requirement: The license requirement stipulated in Article (5) of the Securities Business Regulation.

• -Foreign Portfolio Manager: A foreign financial institution with a legal personality that manages client assets and meets the requirements stipulated in subparagraph (A/2) of Article (6) of these rules and deals or intends to deal with the qualified foreign investor or the applicant for the purpose of investing that person's funds in listed securities.

• -Qualified Foreign Investor: A qualified foreign investor according to these rules for investing in listed securities.

• -Applicant: The foreign investor who submits the qualification application to a licensed evaluator.

• -Citizens of the GCC countries: Natural persons who hold the nationality of one of the GCC countries, and legal persons whose majority capital is owned by citizens of the Council countries or their governments and hold the nationality of one of the Council countries, according to the definition provided in the decision of the Supreme Council of the Gulf Cooperation Council issued in its fifteenth session approved by Council of Ministers Decision No. (16) dated 20/1/1418 H.

• -Institutions affiliated with government entities: Central banks and investment funds - including sovereign funds and funds that take the form of pension and endowment funds - fully owned directly or indirectly by a government entity.

The authority may exempt the applicant or the qualified foreign investor or the licensed person from the application of any of the provisions of these rules, either wholly or partially, either upon a request received from any of them or on its own initiative.

Any person subject to these rules has the right to file a complaint with the Committee regarding any decision or action taken by the Authority in accordance with the provisions of these rules.

It is required for the qualification of the applicant as a qualified foreign investor to meet all the qualification conditions specified in Article (6) of these regulations.

A) Categories of Qualified Financial Institutions

• 1) The applicant must be a financial institution with a legal personality from one of the following categories:

  • A. Banks.

  • B. Brokerage and securities companies.

  • C. Insurance companies.

  • D. Government entities and their affiliated institutions.

  • E. Investment funds.

  • F. Any other financial institution deemed qualified by the authority.

• 2) The financial institutions referred to in subparagraphs (1/A), (1/B), and (1/C) of paragraph (A) of this article must be licensed by a regulatory authority (or subject to its supervision and oversight), and established in a country that applies regulatory and supervisory standards similar to those applied by the authority or accepted by it.

• 3) The financial institutions referred to in subparagraphs (1/D) and (1/E) of paragraph (A) of this article must be established in a country that applies regulatory and supervisory standards similar to those applied by the authority or accepted by it.

• 4) For the purposes of this article, the authority has the sole discretion to determine whether the regulatory and supervisory standards are similar to those applied by the authority or accepted by it, and the authority provides licensed persons engaged in custody or dealing with a list of countries that apply regulatory and supervisory standards similar to those applied by the authority or accepted by it, along with any updates to that list.

• 5) Financial institutions affiliated with a qualified foreign investor or a foreign portfolio manager meeting the requirements of paragraph (B) of this article and the investment funds managed by them are qualified to invest in listed securities, without the need to submit a separate qualification application, provided that the requirements of paragraph (A) of this article are met.

B) Size of the Financial Institution

• 1) Except for the financial institution referred to in subparagraph (1/D) of paragraph (A) of this article, the value of the assets managed or held by the applicant must be (1,875,000,000) one billion eight hundred seventy-five million Saudi Riyals or more (or its equivalent), and the authority may reduce the minimum threshold for these assets.

• 2) For the purposes of these rules, the assets managed by the applicant include the following:

  • A. Assets owned by the applicant or its group for investment purposes, and in relation to the financial institution referred to in subparagraph (1/E) of paragraph (A) of this article, this also includes assets owned by the related foreign portfolio manager or its group for investment purposes.

  • B. Assets managed by the applicant or its group on behalf of another person or persons, and in relation to the financial institution referred to in subparagraph (1/E) of paragraph (A) of this article, this also includes assets managed by the related foreign portfolio manager or its group on behalf of another person or persons.