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      Saudi Arabia seeks to tighten rules on overseas investments

      Saudi Arabia plans to tighten rules on use of borrowed money to trade in overseas financial markets, as the kingdom seeks to strengthen safeguards around foreign investments.

      Under the proposed rules, investors using Saudi-regulated financial institutions to buy foreign securities on margin will have to fund at least half the transaction value themselves, the Capital Market Authority (CMA) said in a statement.

      Planned changes would also require financial institutions to assess whether certain overseas investments are suitable for clients and to prevent margin financing for highly leveraged products and shares in companies whose accumulated losses exceed half their capital.

      The proposals are open for consultation until October 27, before the new framework is due to take effect from November 1.

      In a client note, Sico Bank said the proposal primarily targets higher-risk, leveraged retail traders but promotes stronger risk management.

      “We see the measures as mildly positive for Saudi brokers,” Sico said, adding the proposed 50 percent initial margin requirement is broadly consistent with many other global markets.

      Last week the CMA proposed stringent rules for initial public offerings in an effort to bolster investor protection and market transparency.

      The draft rules indicate that institutional investors participating in the book-building process must prove they have liquidity and can pay for IPO orders. Additionally, the draft proposes that the underwriting agreement will ‌come into effect before book-building begins.

      The last day to receive public feedback is October 22.

      The value of IPOs in the Middle East and Africa fell 71 percent year on year to around $2 billion in the first half of 2026, Reuters reported, citing LSEG data.

      That was the lowest value since 2020, mostly as a result of the US-Iran conflict.

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      Source: AGBI
      .

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