As part of the CMA's efforts to develop the capital market in Saudi Arabia, and based on the Capital Market Law issued by Royal Decree No. (M/30) Dated 02/06/1424 H, the CMA Board issued its Resolution to approve the amendments to the Rules on the Offer of Securities and Continuing Obligations to regulate an additional option for capital increase and the amendment to the Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority, which shall be effective as of the date of their publication.

This amendment aims at regulating capital increase through share issuance with the suspension of preemptive rights in accordance with Article (140) of the Companies Law, including determining the categories of investors that may be targeted in the associated shares offering and setting the maximum increase in capital through share issuance with the suspension of preemptive rights at 15% of the issuer's capital for each capital increase, as an additional option for companies listed on the Exchange in addition to the currently available options to increase capital through rights issue, capitalisation issue, debt conversion, acquisition of a company or asset purchase, and to add the term "share issuance with the suspension of preemptive rights" to the Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority.

It should be noted that it was taken into consideration in this amendment to include the provisions of the CMA Board's Resolution that was announced previously on the CMA's website on 22/4/2021G, in relation to obligating Saudi joint-stock companies, and special purpose entities whose Beneficiary is a Saudi joint-stock company, who issue Saudi riyal-denominated privately placed debt instruments to deposit such debt instruments with the Securities Depository Center Company (Edaa), and obligating Capital Market Institutions through whom private placements of Saudi riyal-denominated debt instruments are made to disclose the issuance profile for the debt instruments offered on the website of the Saudi Exchange Company.

This comes after the CMA published the draft amendments to the Rules on the Offer of Securities and Continuing Obligations to regulate an additional option for capital increase on its website and the Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform), affiliated with the National Competitiveness Center, for public consultation for a period of (30) calendar days.

It should be noted that the CMA, in the course of its periodic review of the rules and regulations it issues, will evaluate the effect of implementing these amendments, including the requirements relating to the percentage of the increase in capital through share issuance with the suspension of preemptive rights and the categories of investors that may be targeted in the associated shares offering under these amendments, and will take into consideration the results of such evaluation as part of the CMA's continuous efforts to develop the capital market.

The amended Rules on the Offer of Securities and Continuing Obligations and the amended Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority can be viewed via the following links:

Rules on the Offer of Securities and Continuing Obligations