The qualified foreign investor (QFI) era will come to an end in Saudi markets on 1 February. The Capital Market Authority (CMA) announced yesterday that Tadawul’s main market will be open to direct investment by all categories of foreign investors. Any foreign investor — institution or individual, resident or non-resident — will be able to open an account and trade directly on TASI in three weeks’ time. You can check out the detailed amendments here (pdf) and here (pdf).

What has changed? Previously, foreign investors needed to prove they were a “qualified” institution with at least USD 500 mn in AUM to get a QFI license, or rely on swap agreements to get exposure without voting rights. The new rules explicitly repeal the section that required non-residents to use swaps for exposure, stating simply: “Foreign natural and legal persons… may invest in all listed securities.” Swaps will remain for derivatives strategies, but they are no longer the price of admission for the main market.

The catch: While access is now universal, ownership is still capped. Despite last year’s announcement by the CMA that foreign ownership limits might be eased, the approved rules still retain two core restrictions: Any single non-resident investor still cannot own 10% or more of a listed company, and aggregate foreign ownership in any single company is still strictly limited to 49%. Analysts estimate that a full removal of the cap could unlock some USD 10 bn of passive inflows.

Why it matters

The QFI framework was a training wheel — a mechanism designed to let foreign capital in slowly, allowing regulators to monitor exactly who was buying. By scrapping it, the CMA is signaling that the Saudi market infrastructure is now robust enough to handle open flows. The regulator is showing it’s comfortable with foreign money, but still cautious about foreign control (or at least until further notice). So far, the decision to scrap the access barriers (QFI) while keeping the ownership caps creates a clear distinction: You are welcome to profit from the Saudi growth story, but you can’t own the shop.

Our take

This preps the market for the 2026 pipeline: With a heavy pipeline of IPOs anticipated, the Kingdom needs to deepen the pool of available capital. Opening the floodgates to non-institutional foreign money is the quickest way to boost liquidity and support valuations without ceding strategic control of listed assets. Saudi Exchange CEO Mohammed Al Rumaih says 40 companies have already filed applications for IPOs going into 2026, while the broader pipeline expands to as many as 100 firms including companies now tapping advisers.

What’s next

The next three weeks will be a stress test for the banks: Local brokers and custodians have until 1 February to update their compliance systems to onboard a class of investor (the non-resident retail foreigner) that essentially didn’t exist in their systems yesterday.

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