An analytical infographic presenting the Saudi stock market reforms proposed over 90 days, highlighting a 30% target allocation for individual investors, post-listing liquidity verification requirements, and a November 2 effective date.

Saudi Arabia’s stock market (Tadawul, or TASI) is preparing for a new phase of improving the quality of initial public offerings and assessing their operational success. The Capital Market Authority is moving to reshape the rules governing IPOs, with a focus on actual post-listing liquidity rather than relying solely on initial subscription figures.

Key elements and figures in the reform plan:

  • Implementation and consultation timeline: A 90-day reform plan was announced, including a consultation period on the draft from September 22 to October 22. The rules are set to take effect on November 2 if approved.
  • Protecting liquidity and ensuring demand quality: Stricter verification of the liquidity behind submitted orders to curb inflated figures, with post-listing liquidity movements considered the most important and realistic measure of an offering’s success.
  • Individual investor allocations: A target allocation of up to 30% for individual investors, which may vary for large offerings. Al-Sudairi’s remarks indicate that the 10% figure is not fixed or absolute.
  • Expected impact: The new regulatory requirements may temporarily slow the pace of listings, but they are intended to ensure offering quality and sustainable trading.

But my question is: Will the new standards succeed in rebalancing institutional demand and individual investor liquidity, making post-listing trading the true measure of companies’ value in the Saudi market?

Disclaimer: This material was prepared under the supervision of a “Yamamah Insights” editor, with the assistance of AI tools, for financial education purposes. It is not a recommendation to buy, sell, or hold any security. The views expressed are those of the authors and do not necessarily reflect the platform’s views.