• a) The purpose of these Rules is to state the provisions for foreign investment in listed securities,

  debt instruments and investment funds.

  b) These Rules shall have no prejudice to the provisions of the Law and its Implementing

  Regulations, including the Rules of Offering Securities and Continuing Obligations, Market

  Conduct Regulations, Capital Market Institutions Regulations, Merger and Acquisition

  Regulations, Investment Accounts Instructions, Listing Rules and other related laws.

  c) Foreign investors must, at all times, comply with the relevant provisions stipulated in the Law

  and its Implementing Regulations, Exchange Rules and its Regulations, and other related laws.

  d) Without prejudice to Paragraph (a) of Article (8) of these Rules, these Rules shall not apply to

  Citizens of the GCC.

a) Any reference to the “Law” in these Rules shall mean the Capital Market Law issued by Royal

• Decree No. (M/30) dated 2/6/1424H.

• b) Without prejudice to Paragraph (c) of this Article, expressions and terms in these Rules have

• the meaning which they bear in the Law and the Glossary of Defined Terms Used in the

• Regulations and Rules of the Capital Market Authority, unless the contrary intention appears.

• c) For the purpose of implementing these Rules, the following expressions and terms shall have

• the meaning they bear as follows unless the contrary intention appears:

  • - Market maker’s client: a market maker’s client who conduct market making activities in accordance with the Exchange Rules.

  • - Authorisation Requirement: authorisation requirement stated in Article (5) of the Securities Business Regulations.

  • - Foreign Portfolio Manager: a foreign financial institution that has a legal personality which manages the assets of clients, which engages or intends to engage with the QFI for the purpose of investing on its behalf in listed securities.

  • - Qualified Foreign Investor (QFI): A foreign investor that is qualified, in accordance with the provisions of Part (3) of these Rules, to invest in shares listed on the Main Market.

  • - Foreign Strategic Investor: a foreign legal entity that aims to own a direct percentage in a listed company's shares for a period of not less than two years, for the purpose of contributing in promoting the financial or operational performance of that listed company.

  • - Citizens of GCC: natural persons who hold the citizenship of one of the Cooperation Council for the Arab States of the Gulf countries, or legal persons that (i) capital of which is majority owned by citizens or governments of the Cooperation Council for the Arab States of the Gulf; and (ii) holding the citizenship of one of the Cooperation Council for the Arab States of the Gulf countries, in accordance with the definition set out in the resolution of the Supreme Council of the Cooperation Council for the Arab States of the Gulf in its 15th session approved by the Council of Ministers Resolution No. (16) dated 20/01/1418H.

  • - GCC: The Cooperation Council for the Arab States of the Gulf.

The Authority may waive a provision of these Rules in whole or in part as it applies to any person either on an application from such person or on the Authority's own initiative.

Any person subject to these Rules may appeal to the Committee in respect of any decision or action that the Authority takes under these Rules.

Foreign natural and legal persons, whether residing or not, may invest in listed securities, debt instruments and investment funds, with due consideration to the provisions stipulated in these Rules.

• a) Investments of non-residing foreign investors in shares listed on the Main Market shall be limited to the following categories:

  • 1) QFI.

  • 2) Foreign Strategic Investor.

  • 3) Ultimate beneficiary in swap agreement with a capital market institution.

  • 4) Foreign natural or legal person, which is a client of a capital market institution authorised by the Authority to conduct managing activity, provided that the capital market institution has been appointed on conditions that enable it to make all investment decisions on the client behalf without obtaining prior approval from the client.

  • 5) Foreign natural person residing in one of the GCC.

  • 6) Foreign natural person who has previously resided in the Kingdom or in one of the GCC, and opened an investment account in the Kingdom while residing in the Kingdom or in one of the GCC.

• b) Investments of foreign investors shall be subject to the following restrictions:

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

  • 2) The maximum proportion of the shares of any issuer whose shares are listed or convertible debt instrument of the issuer that may be owned by all foreign investors (in all categories, whether residents or non-residents, except the foreign strategic investors) in aggregate is (49%).

  • 3) The restrictions set forth in the articles of association of the listed companies.

  • 4) Any regulatory restrictions, or any instructions issued by the competent authorities to which listed companies are subject to.

• c) The Exchange shall publish on its website, as determined by the Authority in this regard, the following information:

  • 1) A statistic reflecting the ownership percentages specified in Subparagraph (2) of Paragraph (b) of this Article.

  • 2) A statistic reflecting the ownership percentage of the Foreign Strategic Investors in listed companies.

  • 3) The restrictions specified in Subparagraphs (3) and (4) of Paragraph (b) of this Article, according to the information received by the Exchange from 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 is one of the categories of investors who are allowed to invest directly in such shares, or becomes an ultimate beneficiary in a swap agreement in accordance with the provisions of Part (4) of these Rules.

• e) The Foreign Strategic Investor, may not sell any of the shares it owned in accordance with these Rules within a period of two years after the date of ownership of such shares. The Capital Market Institution shall not enable any procedure that may violate the provisions of this Paragraph.

• f) The provisions of this Article shall not apply to the investments of all foreign investors (in all categories, whether residents or non-residents) in a foreign issuer’s shares listed on the Main Market.

• a) A foreign investor is required to be a QFI to invest in shares listed on the main market, provided

  that the following qualification conditions must be satisfied:

  • 1) shall have a legal personality.

  • 2) shall have assets under its own or its group ownership, management or custody of SAR (1,875,000,000) one billion eight hundred and seventy-five million Saudi Riyals (or an equivalent amount) or more, at the time of submitting an application to open an investment account. And the Authority may reduce the minimum of these assets.

• b) The condition in Subparagraph (2) of Paragraph (a) of this Article shall not apply to the

  following categories:

  • 1) Pension funds in which their main objective is to collect fees or periodic contributions from participants or for their interest, for the purpose of compensating them according to a specific mechanism.

  • 2) Endowment funds in which their main objective is to making grants to organizations, institutions, or individuals for scientific, educational, and cultural purposes, including university endowments fund.

  • 3) A market maker’s client, provided that the Capital Market Institution verifies that the investment account is for market making purposes.

  • 4) Government entities, central banks, and investment funds fully owned (directly or indirectly) by a government entity, including sovereign funds and funds which take the form of pension and endowments funds; and

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