Riyadh is the center of a new proposal by the Capital Market Authority (CMA) to modify the categories of investors permitted to trade in the Parallel Market, known as Nomu. Could these changes increase the number of participants in the market? According to a press release issued by the CMA, the draft titled Development of Investor Categories in the Parallel Market aims to ease the criteria and requirements that investors must meet to be eligible for trading and investment.
SPA reports that the CMA has called upon relevant and interested persons participating in the capital market to share their feedback on these proposed amendments. The consultation period for this draft is scheduled to last for 30 days, with the deadline for submissions ending on April 28, 2025. How will the market respond to these specific adjustments in eligibility?
The proposed amendments include a revision of the term Qualified Investor in the Parallel Market so that it refers exclusively to the categories eligible to invest in the market. For individual investors, the criteria for entry into Nomu are being eased. Under the new proposed rules, an investor would need to have completed transactions totaling SAR30 million during the past 12 months. Is the removal of quarterly limits a primary driver for this change? The proposal removes the previous requirement that mandated the execution of at least ten transactions per quarter.
Previously, the conditions required individual investors to complete transactions worth SAR40 million through at least ten transactions during the past 12 months. This shift represents a reduction of the minimum transaction value by SAR10 million and the total elimination of the quarterly transaction count requirement. What impact will this reduction have on individual investor accessibility? The CMA expects that easing these requirements will have a positive impact on the market.
Further amendments in the draft include the classification of board members and members of committees emanating from the board of directors in companies listed in the Parallel Market as qualified investors. This allows these specific individuals to invest in the Parallel Market. Will this classification streamline the investment process for corporate leadership? The CMA emphasized that comments from interested and relevant persons will be taken into full consideration before the final Proposed Amendments are approved.
The source did not include the specific method for submitting feedback or the names of the officials overseeing the consultation process.
What are the proposed changes for individual investors in the Parallel Market? The proposed amendments seek to reduce the minimum transaction value required for individual investors from SAR40 million to SAR30 million over the past 12 months. Additionally, the CMA proposes the removal of the previous requirement that mandated investors execute at least ten transactions per quarter to be eligible for the Parallel Market.
Who else is proposed to be classified as a qualified investor in Nomu? The draft amendments include classifying board members as qualified investors allowed to invest in the Parallel Market. Furthermore, members of the committees emanating from the board of directors in companies listed in the Parallel Market are also proposed to be classified as qualified investors.
When does the public consultation period for these amendments end? The Capital Market Authority has established a consultation period that lasts for 30 days. This period for relevant and interested persons to share their feedback on the Development of Investor Categories in the Parallel Market ends on April 28, 2025.
What is the objective of the CMA’s proposed draft regarding investor categories? The proposed draft aims to develop investor categories in the Parallel Market, known as Nomu, by easing the requirements and criteria for eligibility. The CMA expects that these changes to the criteria for trading and investing will have a positive impact on the market.