​The Capital Market Authority recognizes that the inclusion of Saudi Arabia into international indices including MSCI emerging market index, would have a positive effect on the CMA’s strategic objective of further developing the Saudi capital market to create a world class transparent capital market.

The newly updated qualified foreign investor framework has been developed to enhance the participation of institutional investors in the Saudi capital market, thus escalating the required level of governance and disclosure in listed companies, as well as increasing the quality and frequency of market research produced on the local capital market.

As for the inclusion of the Saudi market in the (MSCI) Emerging Markets Index, the Capital Market Authority and the Saudi Stock Exchange (Tadawul), have announced various enhancements to both regulatory and operational models to further develop the Saudi capital market and increase the level of investor protection. These developments include the amendment of the criteria and requirements, to register qualified foreign financial institutions by lowering the minimum value of the assets under management to be SAR 3.75 Billion, rather than SAR 18.75 Billion. Additionally, the CMA allowed the addition of new foreign financial institutions, including sovereign wealth funds, and university endowments, and allowing foreign investors collectively to own larger stake in listed companies up to 49% of the shares outstanding.

Further developments include changes in the transaction settlement cycle of listed shares from (T+0) to (T+2) with no regulatory pre funding requirement and with proper delivery versus payment, all to be introduced before the end of the first half of 2017, thus bringing the Saudi market in line with international standards. In addition, the CMA board has approved the introduction of securities lending and covered short-selling, with regulations that govern this activity to be issued also during the same timeframe.

The Capital Markets Authority is persistent in its efforts to develop the Saudi capital market through applying international best practices. Moreover, the Capital Market Authority and the Saudi Stock Exchange (Tadawul) have conducted periodic discussions with representatives of (MSCI)and are looking to continue these meetings on a continuing basis to achieve the capital market authority's pre-stated development goals as per our 2015-2019 strategic plan