Saudi Capital Market Authority approves new rules to enhance IPO practices

The Saudi Capital Market Authority has approved new regulations to enhance initial public offering (IPO) practices, focusing on increased disclosure and underwriter accountability. These provisions, which will take effect from the date of publication, are part of the Authority's ongoing efforts to develop the financial market, mitigate risks associated with securities transactions, and regulate the activities of entities under its oversight.

The regulations strengthen the role and responsibility of underwriters in the IPO process by requiring the signing and activation of the underwriting agreement before the book-building process begins. Underwriters must commit to purchasing all offered shares at the start of book-building, and if this results in non-compliance with listing requirements, the issuer's shares will not be listed, and the underwriter must purchase the shares.

Additional participation requirements in book-building include verifying the actual liquidity of investors, limiting financial solvency verification to cash or cash equivalents, and ensuring binding payment for requests by the final subscription payment deadline. Issuers must also disclose future forecasts in their prospectus and registration documents, with the financial advisor exercising due professional care in advising on these statements.

The approved regulations aim to reinforce commitment to participation requests, enhance discipline and efficiency in the IPO process, and clarify roles and responsibilities among all parties involved. This should increase the reliability of information for investors while improving IPO practices and making the Saudi financial market more attractive.

The draft regulatory provisions were published on September 22, 2026, for public consultation and feedback.