The Capital Market Authority (CMA) is one of the most prominent regulatory bodies in the Kingdom of Saudi Arabia, playing a pivotal role in organizing and developing the national capital market, which includes the stock market (Tadawul), sukuk, bonds, investment funds, and financial derivatives. Since its establishment in 2003 and its operational launch in early 2004, the CMA has become the sole authority authorized to regulate and monitor securities in the Kingdom, contributing to increased transparency, enhancing investor confidence, and ensuring the protection of market participants' rights. The authority oversees the issuance of regulations and instructions related to public offerings, financial disclosures, granting licenses to financial entities, and enforcing compliance. These efforts align with the Kingdom's Vision 2030 to enhance an attractive and competitive investment environment. In this article, we will detail the tasks of the CMA, its organizational structure, its relationship with the Tadawul market, the latest figures and statistics, as well as the latest regulatory and supervisory developments, to provide a comprehensive picture of its role in the Saudi financial landscape.
Definition of the Saudi Capital Market Authority and Its Main Objectives
The Capital Market Authority was established under the Saudi Capital Market Law issued in 2003. The authority is the only regulatory body authorized to organize and develop the securities market in the Kingdom, including the main and parallel markets (TASI and Nomu), the derivatives market, sukuk and bonds, and investment funds. The authority aims to achieve several strategic objectives, the most prominent of which are protecting investors, ensuring fairness, transparency, and market efficiency, and developing financial products in line with international standards. The authority is also committed to applying best global practices in governance and financial disclosure and developing the financial market infrastructure in line with the aspirations of the national economy and the directions of Vision 2030.
The Regulatory and Legal Framework of the Authority's Work
The Capital Market Authority bases its work on the Capital Market Law and its executive regulations, and it is directly linked to the Prime Minister. The authority's board consists of members representing key ministries and government entities, overseeing the establishment of general policies for the financial market, issuing regulations, and updating legislation to keep pace with local and global developments. The authority has extensive powers that include regulating the issuance of securities, licensing financial intermediaries and asset management companies, monitoring compliance of listed companies with disclosure requirements, and imposing penalties on violators. The authority also collaborates with other supervisory bodies such as the Saudi Central Bank (SAMA) and insurance authorities, achieving integration in oversight across various financial sectors.
The Authority's Role in Protecting Investors and Ensuring Transparency
The Capital Market Authority seeks to protect investors through a range of policies and procedures, including enforcing compliance with periodic financial disclosure by listed companies and verifying the accuracy and transparency of financial reports and material announcements. The authority requires all listed companies to publish their financial results quarterly and annually, and it reviews this data to ensure its accuracy. The authority has also launched electronic platforms that allow investors to file complaints or report any violations or manipulations. The authority continuously works to enhance financial literacy among investors through awareness programs, contributing to empowering investors to make informed investment decisions.
The Authority's Relationship with the Tadawul Market and Listed Companies
All listing and public offering operations in the Saudi stock market (Tadawul) are subject to the oversight and approval of the Capital Market Authority. No company can list its shares or issue sukuk, bonds, or investment funds without obtaining the authority's license and approval. The authority monitors the performance of listed companies and requires them to adhere to disclosure and transparency standards, also mandating the disclosure of any material events that may affect the stock price or shareholders' rights. On the other hand, the authority works to periodically update listing requirements to ensure that companies meet best global practices.
Financial Products Under the Authority's Supervision: Stocks, Sukuk, Funds, Derivatives
The Capital Market Authority supervises a wide range of financial products in the Saudi market. These products include stocks listed on the main market (TASI) and the parallel market (Nomu), government and private sukuk and bonds, investment funds (equity funds, exchange-traded funds, real estate investment trusts), and financial derivatives such as futures and options. The authority sets clear conditions for the issuance of each product and reviews them periodically to ensure their suitability for market needs. The authority also monitors the compliance of companies and investment funds with transparency and disclosure standards, enhancing investor protection and confidence in the market.
Listing Criteria and Requirements in the Saudi Financial Market
The Capital Market Authority sets precise criteria for listing companies in the Saudi financial market. In the main market (TASI), a minimum capital requirement, a certain number of shareholders, audited financial statements for a period of no less than two or three years, and achieving specified profitability levels are required. In the parallel market (Nomu), the requirements are less stringent to encourage small and medium-sized enterprises to list, as a minimum capital and fewer shareholders and a shorter financial period are sufficient. This flexibility allows for a diversity of listed companies and supports capital flow and liquidity in the market.
Recent Statistics on the Authority's Activity and the Financial Market (2024-2025)
Recent official data indicates significant growth in the size and activity of the Saudi market under the supervision of the Capital Market Authority. By the end of the second quarter of 2025, the number of individual investment portfolios reached approximately 13.91 million, an annual increase of nearly 12%. The number of individual investors rose to 6.90 million, and the base of listed companies grew to over 230 in the main market and about 15 in the Nomu market. The main market index (TASI) closed annually at 12,036.50 points by the end of 2024, and the market capitalization of listed shares exceeded 14 trillion Saudi riyals. The annual trading value approached 4 trillion riyals. The authority also supervises over 1,200 licensed investment funds with net assets of approximately 220 billion riyals, along with 400 licensed brokerage firms. These figures reflect increasing confidence from local and international investors in the market and the robustness of the regulatory framework.
The Authority's Strategy 2024-2026: Future and Expansion Vision
In December 2024, the Capital Market Authority adopted its strategic plan for 2024-2026, focusing on enhancing the attractiveness of the Saudi financial market, expanding local and international participation, and developing governance and transparency systems. The strategy includes initiatives to invite more companies for public offerings, develop investment products (especially Sharia-compliant exchange-traded funds), and deepen the sukuk and bond market. The authority also aims to enhance digital infrastructure and simplify licensing procedures, which will accelerate financial innovation and attract foreign investments.
The Authority's Role in Supervision, Inspection, and Imposing Penalties
The Capital Market Authority places utmost importance on monitoring the market and addressing violations and infractions. The authority monitors trading operations, disclosures, and financial reports of listed companies and financial intermediaries. In case of violations (such as manipulation or trading based on insider information), the authority imposes financial penalties on violators, and penalties may include suspending trading on the company's shares for a period. The authority has also launched an electronic platform to receive investor complaints and report violations, which accelerates the investigation process and enhances the quality of oversight.
The Authority's Support for Financial Technologies (FinTech) and Crowdfunding
In line with the requirements of the modern market, the Capital Market Authority has launched initiatives to support the FinTech and crowdfunding sector. The authority grants special licenses to digital platforms that offer innovative investment solutions and sets clear regulations to ensure investor protection in this evolving sector. The authority has also launched educational programs to inform investors about the opportunities and risks of investing in new financial technologies, enhancing the inclusiveness of the market and diversifying its tools.
Opening the Market to Foreign Investors and Enhancing Competitiveness
In recent years, there has been a clear trend from the Capital Market Authority to increase the attractiveness of the Saudi market to foreign investors. New facilities have been introduced for qualified foreign investors, and some restrictions on foreign institutional ownership have been eased. Investment mechanisms in permitted foreign funds have been activated, and cooperation with international regulatory bodies has been strengthened. These measures contribute to increasing liquidity, diversifying the investor base, and raising the ranking of the Saudi market among emerging and advanced markets.
Financial Awareness Programs and Investor Services
The Capital Market Authority establishes periodic financial awareness programs targeting all segments of society, from novice to professional investors. These programs include workshops, educational materials, and electronic platforms that allow investors to learn about their rights and obligations, and the risks of various investment tools. The authority also provides electronic inquiry services about listed companies, licensed brokers, and investment funds, facilitating informed financial decision-making.
Comparing the Capital Market Authority with Other Financial Regulatory Bodies
The Capital Market Authority specializes in regulating the securities market only (stocks, sukuk, funds, derivatives). Other sectors are overseen by different authorities; the Saudi Central Bank (SAMA) supervises the banking sector, and the Insurance Authority oversees insurance companies. This regulatory separation achieves precise and specialized oversight, allowing each financial sector to operate within a dedicated regulatory framework that considers its specificities and challenges.
Developments in the Saudi Capital Market: Opportunities and Challenges for the Authority
Despite the significant growth in the Saudi market, the Capital Market Authority faces ongoing challenges related to global market fluctuations, the emergence of new investment products, and the need to adapt to rapidly evolving financial technologies. The authority continues to keep pace with these developments by updating its regulations, enhancing electronic oversight, and collaborating with global entities. Focusing on enhancing transparency and protecting investors remains one of the authority's top priorities to ensure the sustainability and attractiveness of the market in the future.
Conclusion
The Capital Market Authority plays a pivotal role in building a modern and transparent financial system in the Kingdom of Saudi Arabia by regulating the market, protecting investors, and developing financial products. The results of the authority's efforts are evident in the continuous growth of the number of investors, diversity of financial products, and increased confidence from local and foreign investors. With the ongoing strategic plan for the coming years, the Saudi financial market is expected to witness further development and innovation, enhancing its regional and global standing. To ensure sound investment decisions, SIGMIX reminds all readers of the importance of consulting a licensed financial advisor before taking any investment steps in the Saudi financial market, given potential fluctuations and the need for each investor to assess their financial situation and personal goals.
Frequently Asked Questions
The Capital Market Authority is the sole regulatory body for the securities market in Saudi Arabia, responsible for establishing regulations governing trading, public offerings, financial disclosures, and granting licenses to financial intermediaries. The authority aims to protect investors' rights and ensure fairness and transparency in the Saudi financial market.
Legitimacy can be verified by visiting the official website of the Capital Market Authority or the Tadawul website, where the authority publishes an updated list of listed and licensed companies, along with required disclosure data and financial reports.
According to the latest statistics (Q2 2025), the number of individual investment portfolios reached approximately 13.91 million, and the number of individual investors is 6.90 million, reflecting the widening investor base in the Saudi market.
Investment tools include stocks listed on TASI and Nomu, sukuk and bonds, investment funds (equity funds, indices, REITs), and financial derivatives. All these tools are subject to the authority's oversight and disclosure and transparency requirements.
The main market (TASI) includes large companies that meet capital and profitability standards, while the Nomu market is dedicated to small and medium-sized enterprises with less stringent listing criteria. Both are under the authority's supervision, with differing listing requirements.
The authority imposes financial penalties and regulatory sanctions on violators, which may include suspending trading on shares or suspending the membership of brokers, depending on the type of violation, in addition to ongoing investigations and periodic monitoring of listed companies.
It is required to open an investment account with a licensed financial intermediary from the authority. After that, investors can buy or sell through electronic trading platforms or through brokers, according to the laws and regulations approved by the authority.
Listed companies publish their quarterly and annual financial data on the Capital Market Authority and Tadawul websites. Companies are also required to announce any material events that may affect shareholders' investments.
Requirements vary between the main market (TASI) and the Nomu market, but generally include a minimum capital requirement, a certain number of shareholders, audited financial statements, and profitability requirements. All conditions are subject to review and approval by the Capital Market Authority.
The Capital Market Authority specializes in regulating securities, stocks, and funds, while the Central Bank (SAMA) oversees the banking sector, and the Insurance Authority supervises insurance companies. Each entity regulates its sector independently within an integrated framework.
The authority provides awareness programs and workshops, educational materials, and electronic platforms explaining investors' rights and investment risks, aiming to raise financial awareness and encourage sound investment in the financial market.