On January 6, 2026, Saudi Arabia’s Capital Market Authority (CMA) announced amendments to the regulatory framework governing foreign investment in securities listed on the Main Market of the Saudi Exchange (Tadawul). Effective February 1, 2026, the amendments allow all foreign investorsFor the purposes of this Client Alert, “foreign investors” refers to investors treated as foreign under the CMA’s Rules for Foreign Investment in Securities. This excludes GCC nationals and entities incorporated in a GCC member state that are majority-owned by GCC nationals, which are treated in the same manner as Saudi investors under the CMA framework. to invest directly in shares listed on the Main Market without the need to fall within specified investor categories, subject to existing foreign ownership limits.
Historically, access by non-resident foreign investors to shares listed on the Main Market was limited to certain specified investor types under the CMA’s Rules for Foreign Investment in Securities (the FIS Rules). In practice, this meant that most foreign institutional investors were required to qualify as Qualified Foreign Investors (QFIs) to invest directly in Saudi-listed equities.
The QFI regime imposed a number of eligibility, registration, and ongoing compliance requirements, including minimum AUM thresholds (SAR 1.875 billion / US$500 million), regulatory oversight requirements, and operational track-record criteria. While the CMA progressively relaxed these requirements over time, QFI qualification remained a structural gatekeeper for direct foreign participation.
Under the amended framework, foreign investors may now access the Main Market without qualifying as a QFI, removing a key regulatory barrier to entry and materially simplifying the investment process for international institutions and other foreign investors.
As part of the reforms, the CMA has also abolished the regulatory framework governing equity swap arrangements, which historically were used by certain foreign investors to obtain economic exposure to Saudi-listed shares where direct access was unavailable or impractical. This signals a shift away from indirect or synthetic access mechanisms in favor of direct participation in the Main Market.
While foreign investor access has been expanded, the CMA has not amended the foreign ownership limits applicable to listed companies. Accordingly:
Foreign investors resident in Saudi Arabia are therefore not subject to the individual 10% limit, but remain subject to the 49% aggregate foreign ownership limit.
The amendments simplify access to the Main Market by reducing structural and procedural requirements for foreign investors. While the foreign ownership limits remain unchanged, the reforms are expected to:
Notwithstanding the above, foreign investors will continue to be required to comply with applicable market-level operational requirements, including onboarding through licensed Saudi brokerage firms, custody and settlement arrangements, and the general market conduct rules applicable to all investors.
These amendments mark a meaningful simplification of the rules governing foreign participation in the Saudi Main Market. By allowing all foreign investors to invest directly in listed shares, the CMA has removed the need for investors to fit within prescribed categories, making the market more straightforward to access from both a legal and operational perspective.
More broadly, the changes support the continued development and deepening of the Saudi capital markets by widening the pool of potential investors, increasing diversity within the shareholder base, and reducing barriers to entry for international capital. Over time, this is expected to contribute to greater liquidity, more efficient price discovery, and a more resilient market structure, aligned with the Kingdom’s broader objectives of enhancing market sophistication and positioning the Main Market as a globally competitive venue for equity capital raising.