CMA seeks public input on updated regs for offering, listing of dual-class shares

Logo of Capital Market Authority (CMA)

The Capital Market Authority (CMA) invited stakeholders and interested capital market players to share their feedback on the draft updated regulatory framework for the offering and listing of dual-class shares.

The consultation period runs for 30 days until May 5, the market regulator said in a statement.

The proposed draft aims to develop the existing regulatory framework, including the enhancement of disclosure requirements of dual-class shares. It also covers disclosure requirements for redeemable shares and disclosures related to the conversion of shares from one type or class to another.

This is intended to facilitate the financing of such companies through the capital market, contribute to meeting the financing needs of listed firms and the overall economy, and provide a broader range of investment options for investors.

Moreover, under the new framework, the current regulatory framework for capital top-ups by listed companies will be updated, allowing capital to be raised through the registration and offering of a new type or class of shares that has not been previously listed. This is in addition to ensuring that the increase in issued capital is within the specified cap, thereby enhancing the role of the Saudi capital market in capital structuring.

The proposed amendments also mandate persons owning or having an interest in 5% or more of the voting rights of the issuer's shares to formally notify the Saudi Exchange (Tadawul) of this. At present, the notification requirement is limited to ownership or interest in 5% or more of the issuer's share capital.

This updated regulatory framework comes on the heels of the new Companies Law, which permits companies to issue dual-class shares and grant specific rights or privileges to these classes. The Implementing Regulation of the Companies Law for Listed Joint Stock Companies also include several provisions related to the different types and classes of shares.

The CMA emphasized that inputs of interested persons will be taken into full consideration for the purpose of approving the final amendments, in a bid to enhance and develop the local market’s regulatory environment.

Feedback can be received through the public consultation platform Istitlaa or via email (Laws.Regulations@cma.org.sa).

The Draft Regulatory Framework for the Offering and Listing of Different Classes of Shares