Saudi to loosen foreign ownership limits for stocks

Previously, qualified institutions could only own a maximum of 5 per cent of any listed company

Saudi Arabia will loosen restrictions on foreign ownership in its stock market in order to improve the investment environment, the Capital Market Authority said on Tuesday.

Each investor under Saudi Arabia’s Qualified Foreign Institutions (QFI) scheme, which allows foreign institutions to buy stocks directly, will be allowed to own a stake of just under 10 per cent of a single company, the CMA said.

Previously, each QFI together with its affiliates could only own a maximum of 5 per cent of the shares of any listed company.

To qualify as a QFI, foreign institutions will now only need to have a minimum SAR 3.75bn ($1bn) of assets under management, rather than SAR 18.75bn riyals as previously, the CMA said.

The new rules and their effective date will be published by the end of the first half of 2017, it added.

The CMA said it had also approved the introduction of securities lending and covered short-selling to the market, with regulations for that to be issued before the end of the first half of 2017.