The Capital Market Authority invited all interested parties and market participants to submit their views on several new regulatory projects, most notably improving the efficiency of offerings and defining regulatory frameworks for domestic and overseas investment.

The first project focuses on improving initial offering practices by linking subscription requests during the bookbuilding phase to actual cash liquidity, and requiring underwriters, financial advisers, and issuers to disclose future financial projections to enhance the quality of price discovery.

The second project addresses the framework for dealing in financial markets outside the Kingdom by imposing regulatory controls to protect investors. These include meeting financial suitability requirements and requiring a coverage margin of at least 50% for margin transactions, while prohibiting dealings in high-risk companies or companies with accumulated losses.

Al Yamamah University students discussed the implications of these two projects and their impact on the investment environment and the protection of investors’ rights as follows:

Regulating trading and financial leverage to enhance the reliability of offerings

Student "ذكرى عبدالكريم" @Zikra Abdulkareem explained her view, saying: "Regulating transactions and financial leverage helps reduce risks and preserve liquidity in the market. Linking subscription requests to the actual ability to pay also provides a more accurate picture of the volume of genuine demand, while enhanced disclosure and transparency strengthen local and foreign investors’ confidence in the Saudi market."

The impact of linking actual liquidity on the accuracy of bookbuilding

Student "يزن حمود" @Yazan Hamoud outlined the assessment, saying: "Linking subscription requests to actual liquidity improves the accuracy of the bookbuilding process because it reflects the investor’s true financial solvency. It should be noted, however, that the fairness of the offering price also remains subject to the company’s financial performance and market conditions."

Improving liquidity quality and limiting non-serious requests

Student "البتول بديري" @Albatool Bedairi shared her analysis, saying: "The proposed regulation enhances liquidity quality, not merely its volume. It reduces non-serious requests and makes prices more representative of genuine demand, thereby improving pricing efficiency and attracting a broader investor base over the long term."

Protecting capital and achieving financial stability

Student "دينا العرجاني" @Dina Alarjani emphasized the regulatory aspects, saying: "Regulating leverage in overseas markets protects investors from high risks without restricting investment diversification, while linking subscriptions to liquidity limits excessive requests. Activating the early underwriting commitment and disclosing financial projections also increase transparency and enhance market stability in the future."

Directing liquidity toward investments with measured risks

Student "ربيعه المقيط" @Rabiah Almugait analyzed the impact of governance, saying: "Limiting excessive leverage directs liquidity toward more stable channels and protects investors from amplified risks. Clear regulations and linking requests to the actual ability to pay also provide more realistic valuations for companies going public and attract foreign capital."

Enhancing transparency and protecting national liquidity

Student "رند الخلف" @Rand Alkhalaf explained the regulatory dimensions, saying: "Tightening oversight of overseas transactions protects domestic liquidity and achieves investor protection. Linking offering requests to financial capacity also makes valuations more realistic, increasing the market’s attractiveness to foreign investors."

Eliminating fictitious requests and framing global practices

Student "فيّ الدوسري" @Fay Aldossari added her perspective, saying: "Governance of overseas trading is a fundamental decision to protect national liquidity from the risks of high leverage, while linking subscriptions to actual cash eliminates fictitious requests. The enforcement of the underwriting commitment and disclosure of financial projections also strengthen the transparency practices followed in global markets."

Increasing the responsibility of underwriters and financial advisers

Student "غاده الوعلان" @Ghadah Alwallan highlighted professional roles, saying: "The proposed regulation places greater responsibility on underwriters and financial advisers. Early enforcement of the underwriter’s commitment and disclosure of future projections encourage participating parties to ensure reasonable valuations and avoid turning excessive pricing into a direct risk for them."

Deepening the market and protecting investors from major losses

Student "جمانه الشهري" @Jumana Alshehri pointed to the overall impact, saying: "Regulating margin transactions protects investors from sharp losses and preserves liquidity, while mandatory payment in offerings improves the accuracy of valuations, positively affecting market depth and traders’ confidence."

Attracting institutional liquidity and filtering out fictitious orders

Student "احمد الجدعان" @AHMED ALJADAAN said: "The regulation does not reduce liquidity; rather, it improves its quality by eliminating fictitious requests and unjustified congestion. This paves the way for attracting institutional liquidity, which promotes stability and deepens the market over the long term."

Enhancing confidence and the realism of financial valuations

Colleague "لجين القرشي" @Lujain Algorashi highlighted the investment perspective, saying: "Raising levels of governance and oversight in trading and offerings enhances confidence in the investment environment, as transparency and disclosure enable local and foreign investors to make decisions based on realistic valuations."

Moving toward proactive regulation and a mature offering environment

For her part, student "شهد الخميس" @Shahad Alkhamis explained: "The proposal reflects a shift toward proactive regulation to protect and redirect domestic liquidity. Addressing the problem of non-serious requests also ensures that companies enter trading at prices reflecting their true financial position, while maintaining balance is important to avoid restricting short-term liquidity."

Reservations about restricting capital flows and local intermediaries

Colleague "@يزيد الحميضي" concluded the discussion with a dissenting opinion, saying: "I believe that expanding restrictions on investor freedom could produce counterproductive results, driving capital away and directing liquidity toward global intermediaries outside the scope of local oversight, thereby weakening local intermediaries. The most appropriate regulations are those that enhance transparency and provide a flexible investment environment that attracts investment without imposing excessive constraints."

Balancing investment flexibility with protecting the market from external risks

In an analytical reading, financial and economic analyst "حمد السعيد" @Hamad Alsaeed adds: The Capital Market Authority’s controls on margin trading outside the Kingdom are intended to protect individual investors. They require a margin of at least 50% at execution, which must not fall below 25%. It is noteworthy that these two percentages are consistent with standards applied in global markets, including the United States. The controls regulate investment in overseas markets more than they restrict it. This comes after client assets in overseas markets grew by 71% annually, reaching approximately SAR 36.5 billion in the first quarter of 2026.

As for initial public offerings, which raised approximately SAR 14.5 billion in 2025, linking requests to actual cash limits inflated demand and brings the offering price closer to genuine demand. Disclosing financial projections for at least one year also gives foreign investors a clearer reference point, while their net purchases reached approximately SAR 20.7 billion in 2025.

At the economic level, the impact operates through the efficiency of capital allocation. When proceeds are directed toward actual expansion, investment rises and supports gross domestic product. In my view, some liquidity will return, but it will be of higher quality.

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