Capital market brokerages to see greater flexibility under new amendments

Brokerage firms in the Kingdom will no longer be subject to a fixed minimum capital requirement, providing greater flexibility in their legal structure, under the Capital Market Authority’s (CMA) fresh draft amendments to the Capital Market Law (pdf). The proposed amendments will be up for public consultation onIstitlaa until Thursday, 20 February.

The pitch: The proposed amendments grant the CMA greater flexibility in setting legal structures and capital requirements, aligning Saudi regulations with international best practices. By removing rigid entry barriers, these changes aim to attract more market participants, enhance competition, and support the growth of the brokerage and custody sectors.

What’s new? Executive regulations will define the minimum capital requirement, allowing for adjustments based on the nature of services provided, replacing the fixed SAR 50 mn threshold for brokerage firms. Similarly, the legal structure of brokerages will be determined by the regulations, broadening market participation beyond the current joint-stock company requirement.