Riyadh, September 14, 2024 – Chairman of the Capital Market Authority (CMA) Mohammed bin Abdullah Elkuwaiz announced a new three-year strategy for 2024-2026, building on the success of previous plans that elevated the Saudi financial market among the top ten globally. The strategy, unveiled on September 12, 2024, aims to further cement the market’s critical role in economic development by focusing on financing, ecosystem enablement, and investor protection.
Context and Background
The CMA’s latest strategic plan follows the significant milestones achieved during the 2021-2023 period, which saw a 52% increase in listed companies, a 74% growth in the asset management sector, and an 88% rise in international investments. These achievements underscore the Kingdom’s commitment to modernizing its financial infrastructure under Vision 2030, positioning Saudi Arabia as a leading global investment destination.
Key Details
The new strategy is structured around three main pillars and nine strategic objectives. The first pillar focuses on activating the capital market’s role in financing and investment by enhancing the stock market, developing the Sukuk and debt instruments market, enabling growth in asset management, and attracting international investments. The second pillar aims to enable the financial market ecosystem by supporting market institutions and FinTech innovations. The third pillar prioritizes investor protection through transparency, supervision, compensation mechanisms, and effective deterrence.
Elkuwaiz stated: “Our new strategy emphasizes the creation of a robust debt market, the enhancement of the asset management industry to foster global competitiveness, the attraction of increased investments to the national economy, and the advancement of the stock market and financial technology sectors to lead regionally.”
He further emphasized investor protection, noting: “Given the recent rise in penalties and compensation for market violations, our updated strategy includes a dedicated focus on safeguarding investors. Trust is vital for a successful market, and ensuring the protection of rights and funds is essential for maintaining investor confidence.”
The strategy features over 40 initiatives, including reforms to regulatory frameworks for market offerings and listings, development of investment fund regulations, attraction of international investors, implementation of open finance practices, updates to corporate governance regulations, and improvements to class action compensation procedures.
Implications and Impact
This strategic plan reinforces Saudi Arabia’s position as a regional financial hub, attracting global investors and fostering a stable, transparent investment climate. By focusing on debt market development and FinTech, the CMA aims to diversify the economy and reduce reliance on oil revenues, aligning with broader economic reforms. The emphasis on investor protection is expected to enhance market confidence, encouraging both domestic and international participation.
20 Questions
Q1. What is the main goal of the CMA’s new strategy?
A1. The main goal is to build on previous successes and further cement the Saudi financial market’s role in economic development, enhancing its global standing.
Q2. How long is the new CMA strategy period?
A2. The strategy covers the period from 2024 to 2026, representing a three-year plan.
Q3. Who announced the strategy?
A3. The strategy was announced by Chairman of the Capital Market Authority Mohammed bin Abdullah Elkuwaiz on September 12, 2024.
Q4. How many pillars does the strategy have?
A4. The strategy is structured around three main pillars.
Q5. What is the first pillar about?
A5. The first pillar aims to activate the capital market’s role in financing and investment by enhancing the stock market, developing the Sukuk and debt instruments market, enabling asset management growth, and attracting international investments.
Q6. What does the second pillar focus on?
A6. The second pillar focuses on enabling the financial market ecosystem by supporting market institutions and FinTech innovations.
Q7. What is the focus of the third pillar?
A7. The third pillar prioritizes investor protection through transparency, supervision, compensation mechanisms, and enhanced deterrence.
Q8. What are some key initiatives in the strategy?
A8. Key initiatives include reforms to regulatory frameworks for market offerings and listings, development of investment fund regulations, attraction of international investors, implementation of open finance practices, and updates to corporate governance regulations.
Q9. How many initiatives does the strategy include?
A9. The strategy features over 40 initiatives.
Q10. Why is investor protection important in this strategy?
A10. Investor protection is vital for maintaining trust and confidence in the market, which is essential for attracting and retaining investments.
Q11. What milestones did the previous strategy achieve?
A11. The previous strategy achieved a 52% increase in listed companies, a 74% growth in asset management value, and an 88% increase in international investments.
Q12. How many companies were listed by the end of 2023?
A12. By the end of 2023, the number of listed companies rose to over 310.
Q13. What was the value of the asset management sector in 2023?
A13. The asset management sector’s value climbed to SAR871 billion by the end of 2023.
Q14. How much did international investments grow during the previous strategy?
A14. International investments grew to over SAR480 billion by the end of 2023, up from SAR259 billion in 2019.
Q15. What is the role of FinTech in the new strategy?
A15. FinTech is supported under the second pillar to enable the financial market ecosystem and drive innovation.
Q16. How does the strategy support Sukuk and debt instruments?
A16. The strategy aims to develop the Sukuk and debt instruments market as part of the first pillar’s focus on financing and investment.
Q17. What is the significance of the 2024-2026 strategy for Vision 2030?
A17. The strategy aligns with Vision 2030 by diversifying the economy, attracting foreign investment, and enhancing the capital market’s global competitiveness.
Q18. How does the strategy aim to attract international investors?
A18. It includes initiatives such as attracting international investors, enhancing market services, and implementing open finance practices to make the market more accessible.
Q19. What improvements are planned for corporate governance?
A19. The strategy includes updates to corporate governance regulations to enhance transparency and accountability.
Q20. How will class action compensation procedures be improved?
A20. Improvements to class action compensation procedures aim to facilitate means of compensation for investors, enhancing their protection.
Vision 2030 Alignment
The CMA’s 2024-2026 strategy directly supports Saudi Vision 2030 by driving economic diversification, enhancing the financial sector’s global competitiveness, and attracting foreign investment. By strengthening the capital market’s infrastructure and investor protections, the initiative contributes to the Kingdom’s ambition of becoming a leading global investment hub, fostering sustainable growth and prosperity for future generations.
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