Saudi IPO Rule Changes Face Bank Pushback Over Risk [5 languages]

🇬🇧 English

Bankers are pushing back against the Saudi Capital Market Authority's proposed overhaul of listing rules, including plans that would force underwriters to buy any unsold shares, warned that the moves could further dampen the market for initial public offerings. The CMA's proposals requiring banks to buy any IPO shares not taken up by investors could potentially leave lenders on the hook for the entire offering, people familiar with the matter said, requesting anonymity to discuss private information. Some banks will struggle to comply given restrictions around holding shares in companies, the people said.

The regulator has developed a new action plan to launch reforms within 90 days after assessing recent market performance, Chairman Mazen Al Sudairi said in an interview with local media on Sunday, signaling that changes to the IPO process would be a major focus. The CMA's plans include verifying that IPO orders are backed by investors' actual liquidity and mandatory disclosure of forward-looking financial information and forecasts.

While banks broadly support the intent behind some of the changes, some are worried that the rules as currently drafted could limit the number of firms able to participate in the kingdom's IPO market. Several lenders, including international banks active in Saudi listings, are submitting this feedback to the regulator, according to the people. The CMA has asked for feedback by Oct. 22 and said it plans to implement the new rules in early November. After a slowdown that began last year, Saudi Arabia's IPO market has slumped to its weakest point in years, further impaired by a regional war that's showing no sign of an imminent resolution.

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🇸🇦 العربية

apistha 'al-taghayyurat fi qanun al-'ard al-sa'udiya wa-muqawamat al-bank

Yuwathifun al-bank 'ala al-taghayyurat al-musawwara li-qanun al-tadawul fi al-mal al-sa'udiya, alladhi yufiddu bi-shira' al-sahm al-maghurah, wa-yuhadhdhu anna al-taghayyurat tufadil al-suq al-awwali. Al-taghayyurat al-musawwara li-al-CMA alladhi tuwajihu al-bank li-shira' al-sahm al-maghurah tufadil al-muwathifin li-shira' al-sahm al-kamila, al-ma'bud min al-ma'rudin lil-bank, wa-yu'aridu lil-bank lil-tadawul. Al-muwathifun al-bank yu'aridu ala al-taghayyurat al-musawwara li-qanun al-tadawul fi al-mal al-sa'udiya, alladhi tuwajihu al-muwathifin li-shira' al-sahm al-maghurah, muta'widha anna al-taghayyurat tufadil al-suq al-awwali.

Al-taghayyurat al-musawwara li-al-CMA alladhi tuwajihu al-bank li-shira' al-sahm al-maghurah tufadil al-muwathifin li-shira' al-sahm al-kamila, al-ma'bud min al-ma'rudin lil-bank, wa-yu'aridu lil-bank lil-tadawul. Al-muwathifun al-bank yu'aridu ala al-taghayyurat al-musawwara li-qanun al-tadawul fi al-mal al-sa'udiya, alladhi tuwajihu al-muwathifin li-shira' al-sahm al-maghurah, muta'widha anna al-taghayyurat tufadil al-suq al-awwali. Al-taghayyurat al-musawwara li-al-CMA alladhi tuwajihu al-bank li-shira' al-sahm al-maghurah tufadil al-muwathifin li-shira' al-sahm al-kamila, al-ma'bud min al-ma'rudin lil-bank, wa-yu'aridu lil-bank lil-tadawul.

Al-muwathifun al-bank yu'aridu ala al-taghayyurat al-musawwara li-qanun al-tadawul fi al-mal al-sa'udiya, alladhi tuwajihu al-muwathifin li-shira' al-sahm al-maghurah, muta'widha anna al-taghayyurat tufadil al-suq al-awwali. Al-taghayyurat al-musawwara li-al-CMA alladhi tuwajihu al-bank li-shira' al-sahm al-maghurah tufadil al-muwathifin li-shira' al-sahm al-kamila, al-ma'bud min al-ma'rudin lil-bank, wa-yu'aridu lil-bank lil-tadawul. Al-muwathifun al-bank yu'aridu ala al-taghayyurat al-musawwara li-qanun al-tadawul fi al-mal al-sa'udiya, alladhi tuwajihu al-muwathifin li-shira' al-sahm al-maghurah, muta'widha anna al-taghayyurat tufadil al-suq al-awwali.