Saudi Capital Market Authority proposes new disclosure rules for major shareholders

The Saudi Capital Market Authority has launched a consultation period to gather input on proposed new disclosure rules aimed at bolstering corporate governance and empowering shareholders. This 30-day feedback window closes on November 28, 2026, with the goal of enhancing the governance of listed companies and protecting the interests of shareholders.

Key aspects of the draft project include empowering shareholders holding at least 5% of voting shares to request in-person general assemblies, with the board obliged to comply with such requests. The Authority also gains the power to mandate in-person meetings when deemed necessary. Additionally, companies with accumulated losses of 50% or more of their capital would face stricter disclosure requirements, such as naming and disclosing the ownership percentages of shareholders holding 1% or more of the company's shares, along with the top 20 shareholders.

Shareholders with a minimum of 5% would be entitled to request the inclusion of a loss recovery plan, which must be disclosed on the Saudi Exchange (Tadawul) within 60 days. The board would then be required to publish periodic reports on the plan's progress, detailing targets, deviations, corrective actions, and justifications within five days of each reporting period. These requirements would remain in effect until accumulated losses fall below 20% of capital.

The proposed amendments also seek to improve related party transaction disclosures, enhance audit committee and board responsibilities, and strengthen the independence of audit committees by mandating an independent chair. Rules governing conflicts of interest and stakeholder dealings are also intended to bolster internal controls and governance practices in listed companies.