‌A) Securities may not be offered in the Kingdom except in accordance with the provisions of these rules.
‌B) The term "offering securities" for the purpose of applying these rules means any of the following:

• 1) Issuing securities.

• 2) Inviting the public to subscribe to securities, or promoting them directly or indirectly.

• 3) Any statement, declaration, or communication that is considered, in terms of its resulting effect, as a sale, issuance, or offering of securities.

C) The offering of securities mentioned in paragraph (B) of this article does not include preliminary negotiations or contracts concluded with underwriters or among them.

‌D) The provisions of these rules do not apply to units of investment funds, including real estate investment funds.

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

B) The words and phrases contained in these regulations 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) Any person subject to these regulations 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 regulations.

The offering of securities in the Kingdom shall be through any of the following:

• 1) Exempt offering.

• 2) Private offering.

• 3) Public offering.

• 4) Offering in the parallel market.

The liability for the inaccuracy of the prospectus, or the supplementary prospectus, or the registration document, or the supplementary registration document, or the shareholders' circular, or the supplementary shareholders' circular, or the offering document, or any other documents related to the offering or registration, or for their incompleteness, shall be determined in accordance with the provisions of the law or the Companies Law (as applicable).

The provisions of this chapter apply to the offering of securities in an exempt manner in the Kingdom.

‌A) Without prejudice to the Securities Business Regulations and the Financial Market Institutions Regulations, the offering shall be exempt from the requirements of these rules in any of the following cases:

• 1) If the securities are issued by the Government of the Kingdom.

• 2) If it is an offering of contractual securities. Provided that the offering of unlisted contractual securities is limited to either of the following two cases:

  • A. If all offerees are investors from the category of qualified clients and institutional clients.

  • B. If all offerees are employees of the issuer or any of its affiliates.

• 3) If the offering is for new shares to existing shareholders in the issuer to increase its capital and the issuer's shares are unlisted.

• 4) If the offeree is an affiliate of the issuer unless the offering is for shares of a class listed in the market.

• 5) If all offerees are employees of the issuer or any of its affiliates unless the offering is for new shares of a class listed in the market.

• 6) If the offering is to creditors in the event of bankruptcy.

• 7) If the offering consists of issuing new shares to the issuer's creditors to increase its capital in exchange for their debts owed to the issuer and the issuer's shares are unlisted.

• 8) If the subscription for the total value of the offered securities is less than ten million Saudi Riyals or its equivalent, subject to the following conditions:

  • A. The offering shall not occur more than once during the twelve months following the completion of the offering process.

  • B. The subscription in the securities shall be limited to fifty offerees or less (excluding investors from the category of qualified clients and institutional clients), provided that the amount owed by each offeree (excluding investors from the category of qualified clients and institutional clients) does not exceed two hundred thousand Saudi Riyals or its equivalent.

  • C. The admission of the offeree participating in the subscription (excluding investors from the category of qualified clients and institutional clients) to the issuer or the financial market institution (in case the offering is directed by a financial market institution) acknowledging the risks associated with the investment, including the potential loss of the entire investment amount, and that the Authority does not provide any assurance regarding the accuracy of the documents related to the offering or their completeness, and expressly disclaims any liability or loss arising from what is stated in these documents or reliance on any part thereof, and his knowledge that the issuer or the financial market institution (in case the offering is directed by a financial market institution) is not obliged to notify the Authority of the suitability of this investment for him.

• 9) If the offering is conducted by a licensed financial market institution in the context of its crowdfunding activities in securities, subject to the following requirements and conditions:

  • ‌A. The offering shall be for new shares of the issuer, and the issuer shall not use the proceeds of the offering to provide loans or invest in other establishments, companies, or investment funds.

  • ‌B. The issuer shall not be a company listed on the market, or a company wholly owned by a company listed on the market, or any other issuer or class of issuers as determined by the Authority.

  • ‌C. The total value of the shares offered of the same class through all crowdfunding platforms in securities or the limited offering of the same issuer - during the twelve months following the completion of the offering process - shall not exceed ten million Saudi Riyals or its equivalent, and the offering through the crowdfunding platform in securities shall not coincide with any other offering of the same issuer through another crowdfunding platform in securities or a private offering.

  • ‌D. The offering shall be limited to clients registered on the crowdfunding platform in securities, and the amount owed by each retail client subscribing shall not exceed twenty-five thousand Saudi Riyals or its equivalent for each offering.

  • ‌E. Retail clients shall not be allowed to participate in the subscription for shares of an issuer not established in the Kingdom.

  • ‌F. The issuer shall prepare an offering document in accordance with the requirements of Appendix (1) of these rules, and the offering document shall be made available to clients registered on the crowdfunding platform in securities through the website of the financial market institution for a period of no less than five days prior to the specified date for the commencement of the offering.

  • ‌G. The offering period shall not exceed (45) days, and the total proceeds of the offering during that period shall not be less than 80% of the total value of the offering disclosed in the offering document. In the event that the offering is not completed, the financial market institution must return the subscription amounts to the subscribers - without imposing any fees - within a period not exceeding (5) days from the end of the offering period.

  • ‌H. The financial market institution shall allow the retail client who subscribed to cancel his subscription within (48) hours from the time he submitted the subscription request or until the end of the offering period (whichever comes first), and the financial market institution shall notify its client who subscribed to the offered shares - immediately and without delay - of the completion or cancellation of the offering and when his shares are registered in the issuer's shareholders' register.

  • ‌I. If a material change occurs in the offering document before the commencement of the offering process or after the commencement of the offering and before its completion, the issuer must notify the financial market institution immediately upon becoming aware of that change. In this case, the financial market institution may, at its discretion, request the issuer to resubmit the offering document, and it may also reimpose the five-day period stipulated in subparagraph (F/9) of paragraph (A) of this article. The financial market institution must notify its client who subscribed to the offered shares immediately and without delay of that change, and the client who subscribed before being notified of that change has the right to cancel or amend his subscription before the end of the offering period.

  • ‌J. If a material change occurs in the information disclosed in the offering document after the end of the offering period and before the subscribing client is registered in the shareholders' register, the issuer must notify the financial market institution immediately upon becoming aware of that change. The financial market institution must notify its subscribing client immediately and without delay of that change, and the subscribing client in this case has the right to cancel or amend his subscription.

‌B) The issuer or the financial market institution (in case the offering is directed by a financial market institution) must notify the Authority quarterly of the total number of exempt offerings it has made and their values, in addition to the following information regarding each offering it has made:

• 1) Type of the exempt offering.

• 2) Categories of persons to whom the offering was made.

• 3) The amount paid by each category of offeree in Saudi Riyals.

• 4) Start date of the offering.

• 5) Completion date of the offering.

• 6) Name of the issuer and its nationality.

• 7) Name of the offeror and its nationality.

• 8) Price paid for each security.

• 9) Type of security.

• 10) Total size of the offering.

• 11) Information about the subscribing clients in the shares in case the offering is according to subparagraph (9) of paragraph (A) of this article, indicating any breach of the requirements and conditions imposed under it (if any).

• 12) The admission of the offeree referred to in subparagraph (C/8) of paragraph (A) of this article, including the following information:

  • ‌A. The total amount owed by the offeree participating in the subscription and the number and description of the securities.

  • ‌B. The name of the offeree participating in the subscription and his passport or civil registration number and signature.

  • ‌C. Date of the admission.

‌C) The notice referred to in paragraph (B) of this article must include information related to the offerings that were not completed as follows:

• 1) Number of pending offerings.

• 2) Name of the relevant issuer.

• 3) Name of the relevant offeror.

• 4) Expected date for the completion of the offering.

• 5) Types of securities offered and their categories.

‌D) A person who purchased shares according to subparagraph (9) of paragraph (A) of this article (referred to here as the "transferor") may not offer those shares, nor sell them to a person (referred to here as the "transferee"), unless such offer or sale is made through a licensed financial market institution, and provided that one of the following requirements is met:

• 1) The price to be paid for those shares does not exceed twenty-five thousand Saudi Riyals or its equivalent.

• 2) Offering or selling the shares to an investor from the category of qualified client or institutional client.

• 3) Offering or selling the shares in any other cases as determined by the Authority for these purposes.

‌E) If it is not possible to achieve what is stated in subparagraph (1) of paragraph (D) of this article due to the increase in the price of the shares being offered or sold to the transferee since the date of the original offering, the transferor may offer or sell to the transferee shares if their purchase price during the original offering period does not exceed twenty-five thousand Saudi Riyals or its equivalent.

‌F) If it is not possible to achieve what is stated in paragraph (E) of this article, the transferor may offer or sell the shares if he sells all that he owns of them to one transferee.

‌G) The provisions of paragraphs (D), (E), and (F) of this article apply to all subsequent persons to whom those shares are transferred.

‌H) The restrictions contained in paragraphs (D), (E), (F), and (G) of this article shall be lifted upon the acceptance of the listing of shares in the market of the same class of shares subject to these restrictions.