• A- The purpose of these rules is to clarify the provisions governing foreign investment in listed securities, debt instruments, and investment funds.

• B- These rules do not contravene 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 regulations, the financial market institutions regulations, the merger and acquisition regulations, the investment account instructions, the listing rules, and other related regulations.

• C- Foreign investors must at all times comply with the relevant provisions stipulated in the law, its executive regulations, market rules, and other related regulations.

• D- Without prejudice to what is stated in paragraph (A) of Article Eight of these rules, these rules do not apply to the citizens of the GCC countries.

• 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 AH.

• 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 requires 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 requires otherwise:

  • - Market Maker Client: A market maker client who engages in market-making activities in accordance with the market rules.

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

  • - Foreign Portfolio Manager: A foreign financial institution with a legal personality that manages client assets and deals or intends to deal with the qualified foreign investor for the purpose of investing that person's funds in listed securities.

  • - Qualified Foreign Investor: A qualified foreign investor in accordance with the provisions of Chapter Three of these rules for investing in shares listed on the main market.

  • - Foreign Strategic Investor: A foreign legal entity aiming to acquire a direct percentage of shares in a listed company for a period of no less than two years, for the purpose of contributing to enhancing the financial or operational performance of that listed company.

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

The authority may exempt any person from the application of any of the provisions of these rules, either wholly or partially, either upon a request received from 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.

Natural and legal foreign persons, whether residents or non-residents, are permitted to invest in listed securities, debt instruments, and investment funds, provided that they comply with the provisions stipulated in these regulations.

• A- The investment of non-resident foreigners in shares listed on the main market is limited to the following categories:

  • 1- Qualified foreign investor.

  • 2- Foreign strategic investor.

  • 3- Ultimate beneficiary in a swap agreement concluded with a licensed financial market institution.

  • 4- A natural or legal foreign person who is a client of a licensed financial market institution authorized by the Authority to conduct management activities, provided that the financial market institution has been appointed under conditions that enable it to make all investment decisions on behalf of the client without the need to obtain prior approval from them.

• B- The investments of foreign investors are subject to the following restrictions:

  • 1- A non-resident foreign investor (except for the foreign strategic investor) may not own (10%) or more of the shares of any issuer whose shares are listed or the convertible debt instruments of the issuer.

  • 2- Foreign investors collectively (of all categories, whether residents or non-residents, except for foreign strategic investors) are not allowed to own more than (49%) of the shares of any issuer whose shares are listed or the convertible debt instruments of the issuer.

  • 3- The restrictions stipulated in the articles of association of listed companies.

  • 4- Any regulatory restrictions, or any instructions issued by the competent authorities that apply to listed companies.

• C- The market shall publish on its website - in accordance with what the Authority determines in this regard - the following information:

  • 1- Statistics reflecting the ownership percentages mentioned in subparagraph (2) of paragraph (B) of this article.

  • 2- Statistics reflecting the ownership percentages of foreign strategic investors in listed companies.

  • 3- The restrictions mentioned in subparagraphs (3) and (4) of paragraph (B) of this article, according to the information received by the market from the listed companies in this regard.

• D- A foreign person who invests directly in debt instruments may not convert them into shares listed on the main market unless that person belongs to one of the categories of investors permitted to invest directly in those shares, or becomes an ultimate beneficiary in a swap agreement in accordance with the provisions of Chapter Four of these rules.

• E- A foreign strategic investor may not sell any of the shares they owned under these rules during the two years following the date of acquiring those shares. The financial market institution must not enable any action that would violate the provisions of this paragraph.

• F- The provisions of this article do not apply to the investments of foreign investors (of all categories, whether residents or non-residents) in the shares of the foreign issuer whose shares are listed on the main market.

• A- It is required for a foreign investor to be a qualified foreign investor for investment in shares listed on the main market to meet the following qualification conditions:

  • 1- The person must have a legal personality.

  • 2- The value of the assets owned, managed, or custodied by him or his group must be at least (1,875,000,000) one billion eight hundred seventy-five million Saudi Riyals or more (or its equivalent) at the time of applying to open an investment account, and the Authority has the right to reduce the minimum threshold for these assets.

• B- The condition stated in subparagraph (2) of paragraph (A) of this article does not apply to the following categories:

  • 1- Pension funds whose main objective is to collect fees or periodic contributions from participants or for their benefit; for the purpose of compensating them according to a specific mechanism.

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

  • 3- Market maker clients, provided that the financial market institution verifies that the investment account is for market-making purposes.

  • 4- Government entities, central banks, and investment funds wholly owned directly or indirectly by a government entity, including sovereign funds and funds that take the form of pension and endowment funds.

  • 5- International organizations of which the Kingdom is a member and their affiliated institutions.