Saudi Aramco sets qualified categories, foreign investor’s exemptions for IPO

Saudi Aramco said that the subscription to its share offering will be restricted to two groups of investors:

Tranche (A): The institutional subscribers eligible to participate in the book-building process.

This tranche will include:

- Public and private funds that invest in securities listed on the Saudi Stock Exchange (Tadawul);

- Authorized persons licensed to deal in securities as a principal, in compliance with the provisions set forth in the Capital Markets Authority (CMA’s) prudential rules, when submitting an application form to the CMA;

- Clients of a person authorized by the CMA to conduct managing activities with the provisions and restrictions set forth in the book-building instructions;

- Legal persons allowed to open an investment account in the Kingdom, and an account with the Depositary Centre, with the exception of non-resident foreign investors, other than Qualified Foreign Investors;

- Government entities, any supranational authority recognized by the CMA, the Exchange, or any other stock exchange recognized by the CMA, or the Depositary Centre;

- Government-owned companies, whether investing directly or through a portfolio manager;

- GCC companies, and GCC funds if allowed according to the terms and conditions of such funds.

Tranche (B): The individual subscribers: Comprise Saudi Arabian nationals; including any Saudi female divorcee or widow with minor children from a non-Saudi father, as she can subscribe for her own benefit or in the names of her minor children, on the condition that she proves that she is a divorcee or widow and the mother of her minor children; and any non-Saudi natural person who is resident in the Kingdom and any GCC national, in each case who has a bank account with one of the receiving entities;

Foreign investors: The CMA issued a decision exempting non-resident institutional foreign investors that intend to subscribe to shares in the IPO, and that meet the qualification conditions under Article 6 of the Rules for Qualified Foreign Financial Institutions Investment in Listed Securities;

A further decision was issued by the CMA enabling certain non-financial institutions intending to participate in the IPO (Specialized Investors) that do not meet the qualification conditions under Article 6 of the QFFILS to be considered as qualified Foreign Investors.

Each foreign investor will be required to have: - A portfolio account opened at the Saudi Central Securities Depositary (Edaa); access to its own custody account in Saudi Arabia; a securities account in their name through their global custodian; and a trading account with its respective local broker.

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