RIYADH — Saudi Arabia has fully opened its capital market to all categories of foreign investors for the first time on Sunday, Feb. 1. This allows all types of overseas institutions and funds to trade directly on Tadawul All Share Index (TASI), the main stock market.As of Sunday, all categories of foreign investors, including institutions, funds, and other qualified entities, can access Saudi equities without prior qualification requirements, bringing the market closer in line with international access standards. This was in line with a previously announced decision by the Board of Capital Market Authority (CMA), with its approval of a new regulatory framework permitting non-resident foreign investors to invest directly in the main market, making the capital market accessible to a broad range of global investors. The CMA Board decision allows foreign investors to enter the market without qualification requirements, abolishes the regulatory framework governing swap agreements, and permits direct investment in shares listed on the main market. However, opening the market does not eliminate foreign ownership limits in listed companies, as some firms remain subject to maximum foreign ownership caps under their regulations. Under the new framework, foreign investors are classified as resident foreigner, foreign resident in GCC countries, non-resident foreigner, foreign legal entity, foreign strategic investor, and foreign fund. Non-resident foreign investors—excluding strategic foreign investors—are prohibited from holding 10 percent or more of the shares in any listed company. In addition, total foreign ownership, whether by resident or non-resident investors and excluding strategic investors, is capped at 49 percent of a listed issuer’s shares. The CMB Board recently approved amendments with the aim to expand and diversify the investor base in the main market, support investment inflows and enhance market liquidity. Under the new framework, the CMA has eliminated the concept of the Qualified Foreign Investor (QFI) in the main market, enabling all categories of foreign investors to access the market without the need to meet qualification requirements. The amendments also abolished the regulatory framework governing swap agreements, which previously allowed non-resident foreign investors to gain only economic exposure to listed securities, and now permit direct share ownership in the main market. The CMA said the amendments are expected to attract additional international investment.It is noteworthy that international investors’ ownership in the Saudi capital market exceeded SR590 billion by the end of the third quarter of 2025. Foreign investments in the main market reached about SR519 billion during the same period, up from SR498 billion at the end of 2024.
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