The term (Law) wherever it appears in these regulations refers to the Capital Market Law issued by Royal Decree No. M/30 dated 14/6/1424 AH.
A) These rules aim to regulate the offering of shares, their registration, and their acceptance for listing in the parallel market in the Kingdom.
B) Shares may not be offered for the purpose of listing in the parallel market unless the requirements and conditions stipulated in these rules are met.
C) The instructions for building the order book and allocating shares in initial public offerings do not apply to the offering of shares conducted under these rules.
D) The Corporate Governance Regulations are advisory for all issuers whose shares are listed in the parallel market unless another system, regulation, or decision from the Board of the Authority stipulates the mandatory application of some of its provisions to issuers whose shares are listed in the parallel market.
E) These rules do not contravene the provisions set forth in the Securities Offering Regulations.
A) The words and phrases contained in these rules shall have the meanings specified 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.
B) 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:
Prospectus: The document required for the offering of shares under the Capital Market Law and these rules.
Parallel Market: The market in which shares that have been registered and accepted for listing under these rules are traded, along with the special rights of priority related to those shares.
Main Market: The market in which securities that have been registered and accepted for listing under the registration and listing rules are traded.
Shareholders' Circular: The document required in the cases specified in these rules to amend the capital of the issuer in order to enable shareholders to vote in the relevant general assembly based on knowledge and awareness.
Public: In these rules, refers to individuals not mentioned below:
1) Subsidiaries of the issuer.
2) Major shareholders in the issuer.
3) Members of the board of directors and senior executives of the issuer.
4) Members of the boards of directors and senior executives of the subsidiaries of the issuer.
5) Members of the boards of directors and senior executives of major shareholders in the issuer.
6) Any relatives of the individuals referred to in (1, 2, 3, 4, or 5) above.
7) Any company controlled by any of the individuals referred to in (1, 2, 3, 4, 5, or 6) above.
8) Individuals who work together and collectively own (5%) or more of the class of shares intended for listing.
Qualified Investor: Any of the following individuals:
1) Licensed individuals acting on their own account.
2) Clients of a licensed individual in the practice of management, provided that the licensed individual has been appointed under conditions that enable them to make decisions regarding acceptance of participation in the offering and investment in the parallel market on behalf of the client without the need to obtain prior approval from them.
3) The Government of the Kingdom, or any governmental entity, or any international body recognized by the Authority or the market, and any other financial market recognized by the Authority, or the deposit center.
4) Companies owned by the government, directly or through a portfolio managed by a licensed individual in the practice of management.
5) Companies and funds established in the GCC countries.
6) Investment funds.
7) Qualified foreign investors.
8) Any other legal entities that are permitted to open an investment account in the Kingdom and an account with the deposit center.
9) Natural persons who are permitted to open an investment account in the Kingdom and an account with the deposit center, and who meet any of the following criteria:
A) They have executed transactions in financial markets with a total value of no less than forty million Saudi Riyals and no less than ten transactions in each quarter during the past twelve months.
B) The average size of their securities portfolio exceeds ten million Saudi Riyals during the past twelve months.
C) They hold a general certificate for dealing in securities accredited by the Authority.
10) Any other individuals specified by the Authority.
A) The offering under these rules is limited to categories of qualified investors, and the financial consultant of the issuer is responsible for ensuring compliance with this paragraph.
B) The trading of shares listed in the parallel market is restricted to qualified investors. The licensed person through whom the shares are traded in the parallel market and the rights of priority related to those shares is responsible for ensuring compliance with this paragraph.
C) In all cases, licensed persons must ensure that their qualified investor clients are aware of the risks associated with investing in the parallel market and obtain written confirmation from them indicating that they are informed and aware of these risks, prior to their participation in the parallel market.
D) Notwithstanding paragraph (B) of this article, shareholders of the issuer - who are not qualified investors - that acquired their shares before their listing in the parallel market may trade in those shares and the rights of priority issued by that issuer. The licensed person through whom the shares are traded in the parallel market and the rights of priority related to those shares is responsible for ensuring compliance with this paragraph.
(a) The issuer must appoint representatives before the Authority for all purposes related to the Law and these rules, provided that one of them is a member of the Board of Directors and the other is a senior executive.
(b) The issuer must provide written details on how to contact its representatives, including office phone numbers, mobile numbers, fax numbers, and email addresses.
Any person subject to these rules has the right to appeal to the committee regarding any decision or action taken by the authority in accordance with the provisions of these rules.
A) The issuer must appoint a financial advisor when applying for the registration of its shares and acceptance for listing on the parallel market, and a prospectus or shareholder circular (as applicable) must be submitted with it.
B) The issuer whose shares are listed on the parallel market must appoint a financial advisor upon voluntary delisting.
C) The issuer whose shares are listed on the parallel market must appoint a financial advisor when applying for a capital reduction.
D) The Authority may at all times request the issuer to appoint a legal advisor or financial advisor or others to provide advice to the issuer regarding the application of the provisions of these rules or the Law or its executive regulations.
A) The financial consultant of the issuer must be licensed by the Authority.
B) When the issuer submits a claim to the Authority for the registration of shares and acceptance of their listing in the parallel market, the financial consultant must comply with the following:
1) To be the main point of contact with the Authority regarding the claim.
2) To ensure personally - after exercising the necessary professional diligence and inquiring from the issuer and its advisors - that the issuer has met all the required conditions for the registration of its shares and acceptance of their listing, as well as all other related requirements.
3) To provide any information or clarifications to the Authority in the required format and within the timeframe specified; for the purpose of verifying the compliance of the financial consultant and the issuer with the law and its executive regulations.
4) To submit a letter to the Authority in the format provided in Appendix (3) of these rules.
C) If the financial consultant becomes aware of any information that he believes the Authority should consider during the period between the submission of the letter referred to in subparagraph (4) of paragraph (B) of this article and the listing of the issuer's shares, the financial consultant must inform the Authority of this without delay.