The CMA, or Saudi Capital Market Authority, is the cornerstone of regulating and governing capital markets in the Kingdom of Saudi Arabia. Since its establishment in 2003, the CMA has operated as an independent entity aimed at regulating and developing the financial market environment, including the main stock market (Tadawul), the parallel market, investment funds, sukuk, and bonds. The authority plays a pivotal role in protecting investors, enhancing transparency, and increasing market efficiency within the framework of Saudi Vision 2030. Its tasks cover a wide range, from issuing regulatory frameworks, monitoring compliance with governance standards, supervising brokerage firms, to managing compensation funds for investors harmed by violations. With the growing importance of investment in the Saudi market and the rising volume of trading and liquidity, the CMA has become a key player in achieving balance and stability, ensuring an attractive and safe investment environment for both local and foreign investors. In this article, we provide a detailed overview of everything you need to know about the CMA: from its definition and structure to the latest statistical data, regulations, regulatory developments, and investor protection methods, focusing on the actual impact of the authority on the investor experience in the Saudi market.
What is the Capital Market Authority (CMA)? Definition and Core Role
The CMA, or Saudi Capital Market Authority, is the independent regulatory body responsible for regulating and developing capital markets in the Kingdom. Established under the Capital Market Law in 2003, it operates as a supervisory authority focused on ensuring market efficiency and fairness, protecting investors' rights, and enhancing the investment environment to support the goals of Vision 2030.
The CMA oversees all activities related to securities, from the main stock market (Tadawul), the parallel market, investment funds, to debt instruments such as sukuk and bonds. Its core tasks include issuing regulatory frameworks, granting licenses to brokerage and investment management firms, supervising company listings, monitoring disclosure and transparency, and ensuring compliance with governance standards.
The importance of the CMA is evident in its role as a guardian of the financial system: it sets controls to prevent violations such as insider trading and manages the compensation fund for investors harmed by market violations. This distinguishes it from the Saudi Stock Exchange (Tadawul), which serves as the operational platform for trading. The authority coordinates with other government entities, such as the Ministry of Finance and the Saudi Central Bank, to ensure the safety and stability of the Saudi financial sector.
Organizational Structure and Human Resources at CMA
The CMA follows an organizational model based on a hierarchical management structure headed by a board of directors consisting of a governor, deputies, and specialized members. The board is appointed by royal decree based on professional and financial criteria. The board is responsible for setting the overall strategy and regulatory policies, while executive tasks are distributed among specialized departments (such as the Supervision Department, Licensing Department, and Investor Protection Department).
By mid-2025, more than 7,000 employees will be working within licensed brokerage and investment firms, with a localization rate of about 78% of the workforce in the financial sector, reflecting the authority's commitment to enhancing Saudization and localizing competencies.
CMA employees receive high-level training in financial, legal, and technical aspects. The authority also employs advanced technical resources to monitor trading and detect violations, continuously developing human capabilities through training programs and postgraduate studies in collaboration with local and international educational and financial institutions. This integrated structure has enabled the authority to address regulatory challenges and support the Kingdom's aspirations to build a developed and reliable financial market.
Regulations and Regulatory Instructions Issued by CMA
The CMA is responsible for issuing and updating the regulatory frameworks governing all securities activities in Saudi Arabia. These regulations include rules for offerings and listings, continuous disclosure instructions, governance standards, foreign ownership controls, anti-manipulation and anti-money laundering systems, and rules for dealing with brokers and fund managers.
All brokerage firms, asset managers, and investment funds operating in the market are subject to strict oversight by the authority, and they must obtain valid licenses from the CMA. Regulations are periodically reviewed to keep pace with local and global developments in financial markets, ensuring the highest levels of fairness and transparency for investors.
Among the most notable recent amendments: facilitating the opening of investment accounts for foreigners, tightening disclosure requirements for listed companies, and launching sustainability initiatives such as requiring companies to disclose corporate governance and environmental standards (ESG) by the end of 2025. These regulations reflect the authority's dynamic approach to keeping up with global economic developments and the requirements of local and international investors.
Investor Protection: Monitoring System and Compensation Fund
The CMA places investor protection at the heart of its regulatory mission. The authority relies on an advanced electronic monitoring system (automated monitoring system) that tracks trades for any unusual patterns or violations such as price manipulation or trading based on insider information. When a violation is suspected, the authority investigates and takes necessary actions, including imposing fines, suspending accounts, or referring cases to the relevant judicial authorities.
The authority launched the Investor Compensation Fund aimed at compensating individuals harmed by violations of licensed entities (such as brokerage firms or investment managers). In 2024, the total compensation paid to affected investors was approximately 389 million Saudi Riyals, reflecting the effectiveness of the regulatory system in recovering individuals' rights and enhancing trust in the market.
The authority also provides effective communication channels for receiving complaints and inquiries, working to resolve disputes as quickly as possible, while publishing periodic reports on the fund's performance and the number of cases processed.
Opening Investment Accounts and Trading Requirements According to CMA
The CMA sets a clear framework for opening investment accounts for individuals and institutions for the purpose of investing in stocks, bonds, or listed sukuk. Opening an account requires contracting with a licensed financial broker, providing identity verification documents, and passing 'Know Your Customer' (KYC) procedures. Recently, regulations have been updated to facilitate account opening for foreigners and non-residents, allowing electronic identity verification options through the 'Nafath' platform.
Most brokerage firms do not require a minimum deposit to open an account, but some firms may impose additional requirements based on their risk policy. All new accounts are registered electronically and are subject to the authority's continuous monitoring to ensure compliance with the regulations and to mitigate potential risks (such as money laundering or fake accounts). Investors are required to agree to trading and disclosure policies and to update their information periodically according to the authority's instructions.
These procedures provide flexible and secure access for all categories of investors to the Saudi market while maintaining the integrity and stability of the financial system.
Foreign Ownership Limits in the Saudi Market and Regulatory Developments
The Saudi market has witnessed significant transformations in foreign ownership policy thanks to CMA initiatives. Initially, the maximum foreign ownership limit in a listed company was no more than 5%. With the aim of enhancing the flow of foreign capital, the authority gradually raised this ceiling to reach 30% of the shares of any listed company by the end of 2024.
This step is part of a broader strategy to attract foreign investors, increase market depth, and enhance liquidity and stability. It also contributes to elevating the Saudi market's global standing within emerging market indices.
The CMA recently announced that it will review this percentage in 2026, potentially allowing for greater flexibility or gradual increases in the ceiling based on economic conditions and international standards. This approach balances protecting the local market while stimulating foreign investment and provides investors with a clearer view of the regulatory environment in the Kingdom.
Market Capitalization, Liquidity, and Number of Listed Companies in the Saudi Market
The Saudi financial market has experienced accelerated growth in recent years, supported by effective regulatory measures from the CMA. By the end of 2024, the number of companies listed in the main market exceeded 212, in addition to more than 20 companies in the parallel market.
The market capitalization of listed stocks reached approximately 9.0–9.5 trillion Saudi Riyals (2.4 trillion USD), with an average daily trading value exceeding 10–12 billion Riyals in the main market. This reflects the significant liquidity and interest from individual and institutional investors, with the number of active investment accounts rising to around 4 million accounts.
Market capitalization is distributed across sectors such as banking, energy, real estate, industry, and services, with major sectors accounting for about 70% of the total market capitalization. The market has also seen growth in sukuk and bond issuances, which exceeded 200 billion Riyals of traded debt instruments in 2024.
Financial and Operational Resources of the Authority: CMA Revenues and Expenses
The CMA enjoys an independent budget funded by licensing, supervision fees, and securities issuances, without direct reliance on the government budget. In 2024, the authority's operational revenues reached approximately 1.81 billion Saudi Riyals, against operational expenses of about 970 million Riyals, reflecting a sustainable financial model and a surplus that supports regulatory and technical development plans.
The authority's revenues include licensing fees for companies, listing fees, and trading supervision fees, while expenses focus on developing monitoring systems, training employees, updating technical infrastructure, and launching investor awareness initiatives.
This strong financial position allows the authority greater flexibility in implementing its regulatory policies and investing in early risk detection technologies, ensuring the sustainability of the development of the Saudi financial market.
Recent Regulatory Developments and Policies at CMA (2024-2025)
The CMA has kept pace with global developments in financial markets by continuously updating its regulations and policies. In 2024 and 2025, the authority launched a package of amendments that included facilitating the opening of investment accounts for foreigners, updating disclosure requirements, and expanding the scope of corporate governance for listed companies.
Recent amendments focused on enhancing transparency, accelerating account registration processes, and adopting sustainability (ESG) standards as a mandatory part of annual corporate reports by the end of 2025. The authority also launched partnerships with international bodies to enhance legal protection for foreign investors and participated in green financing initiatives and the localization of financial technology.
Recent developments also include reviewing the foreign ownership ceiling, expanding support for small and medium-sized enterprises in the Growth Market, and updating policies for financial data disclosure and governance. All of this has strengthened the Saudi market's position among emerging markets and attracted more global capital.
The Relationship Between CMA and the Saudi Stock Exchange (Tadawul)
It is important to distinguish between the role of the CMA and that of the Saudi Stock Exchange (Tadawul). While the CMA is the regulatory body that sets the rules, licenses, and monitors compliance, Tadawul is the operational entity that manages the trading platform and executes transactions.
The CMA is responsible for licensing and supervision, enacting laws, monitoring compliance of listed companies, protecting investors' rights, and investigating violations. On the other hand, Tadawul is responsible for the technical infrastructure of the market: managing buy and sell orders, settling transactions, publishing prices, and providing trading services to investors through brokers.
This integration between the two entities creates a comprehensive investment environment where the authority ensures fairness and efficiency, while Tadawul enables investors to execute their orders smoothly and securely.
CMA's Role in Supporting Saudi Vision 2030 and Developing the Financial Market
The CMA plays a pivotal role in achieving the goals of Saudi Vision 2030 by developing the legislative environment of the financial market, attracting foreign investments, and expanding the base of local investors.
The authority's contributions include updating regulations to raise the foreign ownership ceiling, enhancing transparency and disclosure, developing advanced digital infrastructure, and supporting the listing of small and medium-sized enterprises through the Growth Market. The authority also supports financial innovation by encouraging fintech and regulating crowdfunding and venture capital funds.
This has led to an increase in the stock market's share of GDP, an increase in the number of active investors, and the attraction of major local and international investment funds. The authority continuously seeks to update its systems in line with global best practices and develop financial awareness programs for the community to raise investment awareness.
Protecting the Market from Manipulation and Illegal Practices: Monitoring Mechanisms
The CMA relies on an advanced monitoring system for the early detection of illegal practices in the financial market. This includes electronic systems that monitor all operations for any unusual trading patterns, such as price manipulation, trading based on insider information, or exploiting fake accounts.
When a violation is suspected, the authority initiates investigation procedures that may include requesting additional documents, interrogating the parties involved, and analyzing technical data. Penalties are imposed on violators according to the Capital Market Law, ranging from financial fines, temporary or permanent suspensions, and sometimes referral to the relevant judicial authorities.
These mechanisms contribute to increasing investor confidence in the market, reducing systemic risks, and maintaining integrity and fairness for all participants. The authority also provides periodic awareness programs to empower investors to recognize risks and report any suspicious activities.
Investor Complaints and Dispute Resolution Mechanism with Licensed Entities
The CMA provides official and transparent channels for receiving complaints from investors against brokerage firms or any licensed entity. Complaints can be submitted electronically via the authority's website, through mobile applications, or through the customer service center.
Complaints require detailing the issue and attaching supporting documents, such as account statements or trading contracts. The authority reviews the complaint and refers it to a specialized committee that investigates its circumstances, obligating the concerned entity to respond within a specified period (usually 30 days).
After studying the case, the authority issues a decision to resolve the dispute or take corrective actions, and one can also refer to the Securities Dispute Resolution Committee for final judicial resolution. These procedures aim to ensure justice and expedite dispute resolution, enhancing investor confidence in the financial system.
Comparing CMA with Local and Global Financial Regulatory Authorities
The CMA is comparable to many financial regulatory bodies worldwide, such as the U.S. Securities and Exchange Commission (SEC) and the UK's Financial Conduct Authority (FCA). However, unlike competing entities in the commercial market, there is no 'direct competition' for the authority in Saudi Arabia; rather, there are complementary bodies such as the Saudi Arabian Monetary Authority (SAMA) that oversee banks and insurance companies.
The CMA excels in adopting global governance standards, periodically updating regulations, and gradually opening the market to foreign investments. The authority also keeps pace with developments in financial technology, green financing, and regulating debt instruments and sukuk.
The integration between local regulatory bodies (CMA, SAMA, and telecommunications authorities) enhances the stability of the financial system and provides investors with a comprehensive and secure environment. In the international context, the authority enjoys recognition and partnerships with global organizations and participates in international initiatives to develop capital markets.
Conclusion
The Saudi Capital Market Authority (CMA) plays an indispensable role in developing the legislative framework and ensuring the stability and growth of the financial market in the Kingdom. Through an integrated regulatory system and regulations aligned with global best practices, the authority works to protect investors, enhance transparency, and attract local and foreign investments, serving the objectives of Vision 2030. By updating regulatory policies, supporting financial innovation, and providing effective channels for dispute resolution, the CMA positions the Kingdom among global financial markets in terms of attractiveness and stability. With ongoing developments in the market, it is essential for every investor or prospective market entrant to understand the authority's role and its regulatory frameworks. We always remind the importance of consulting a licensed financial advisor before making any investment decisions, and you can follow the latest updates and obtain reliable resources about the Saudi financial market through the SIGMIX platform.
Frequently Asked Questions
The function of the CMA is to regulate and develop Saudi capital markets, protect investors' rights, and enhance transparency and fairness in trading. The authority sets regulatory frameworks, grants licenses to brokerage firms and investment funds, supervises disclosures, and monitors the market to prevent violations such as manipulation or insider trading. The authority also manages the Investor Compensation Fund for those harmed by violations.
To open an investment account, you must contract with a financial broker licensed by the CMA. This requires providing identity verification, passing Know Your Customer (KYC) procedures, and agreeing to trading policies. The authority has recently provided facilities for foreigners and non-residents, such as electronic identity verification through 'Nafath'. All accounts are monitored according to the authority's regulations to ensure security and transparency.
The CMA has set the foreign ownership ceiling in listed companies at 30% per company until the end of 2024, after previously being 5%. The authority is currently reviewing this limit and may gradually raise it during 2026 to enhance the flow of foreign investments while balancing the protection of the local market and the attractiveness of international investment.
The CMA established the Investor Compensation Fund to compensate individuals harmed by violations of licensed entities such as brokerage firms or investment managers. To benefit, you must submit an official complaint to the authority, and after verifying the violation and establishing entitlement, compensation will be disbursed according to the fund's regulations. In 2024, the total compensation paid was approximately 389 million Saudi Riyals.
The CMA relies on advanced monitoring systems to detect any illegal trading patterns such as price manipulation or trading based on insider information. In case of a violation, the authority initiates an official investigation and imposes financial or penal sanctions as necessary. It also provides communication channels for investors to report any suspicious activities in the market.
The CMA is the regulatory body that sets the rules, licenses, and monitors compliance in the Saudi financial market. In contrast, 'Tadawul' is the operational entity that manages the market platform, executes buy and sell orders, and publishes prices. The authority focuses on oversight and supervision, while Tadawul focuses on technical operations and executing transactions.
Currently, the CMA does not issue any licenses for trading or investing in cryptocurrencies and considers dealing in them outside its supervision. The authority has warned of the risks associated with unregulated virtual currencies, emphasizing that licensed investment is limited to stocks, sukuk, and bonds listed in the official market.
Complaints can be submitted electronically via the authority's website or official applications, detailing the issue and attaching supporting documents. The authority reviews the complaint and refers it to the relevant entity for investigation, obligating the entity to respond within a specified period. This service aims to protect investors and ensure fairness in the market.
The CMA aims to develop an advanced financial market attractive to global investments by updating regulations, enhancing transparency, supporting financial innovation, and expanding the investor base. In doing so, the authority contributes to achieving the objectives of Vision 2030 by diversifying the Saudi economy and increasing the attractiveness of the financial market.
There is no direct competition, as the CMA is an independent regulatory body. However, there are complementary regulatory bodies such as the Saudi Arabian Monetary Authority (SAMA) overseeing banks and the telecommunications authority overseeing the telecommunications sector. These bodies work together to ensure a stable and comprehensive financial environment.