The Capital Market Authority (the "CMA") has launched a public consultation on proposed amendments to brokerage licensing requirements under the Capital Market Law. This initiative represents a significant step toward aligning Saudi regulations with international best practices, enhancing competition, and driving innovation in the Saudi capital market. The reforms aim to:
- Enhance market accessibility and foster competition.
- Stimulate the growth of the asset management industry by developing the services provided in dealing and custody activities and promoting the development of innovative financial products and services.
- Reduce costs and improve service quality for market participants.
- Attract international brokerage firms to strengthen Saudi Arabia's capital market.
Key Proposed Changes
The proposed amendments introduce greater flexibility by:
- Expanding legal structures (Article 32): Shifting the determination of legal structure for brokerage firms to the CMA's implementing regulations, allowing firms to adopt legal structures suited to their activities rather than requiring joint-stock company status.
- Revising capital requirements (Article 33): Transferring the determination of minimum capital requirements for brokerage firms to the CMA's implementing regulations, replacing the fixed SAR 50 million threshold.
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