​The Board of the Capital Market Authority ("CMA") issued its resolution to approve the Instructions on the Price Stabilisation Mechanism for Initial Public Offerings (“Instructions”) to be effective from its publication date. The draft Instructions on the Price Stabilisation Mechanism for Initial Public Offerings was made available earlier for public consultation on the CMA’s official website for a period of 30 calendar days.

The CMA announced in its statement that the Instructions aims to regulate the price stabilization activities for the shares of newly listed companies on the Exchange after the initial public offering, and determine the requirements to be met by the Price Stabilisation Manager, its obligations when conducting the Price Stabilisation Mechanism, and the exemptions related to the actions taken during the Price Stabilisation Period.

The CMA added that the Instructions came in continuance to its efforts to develop the capital market, which included the introduction of the regulation for the price stabilisation activities in line with the best international practices in this regard and in accordance with the powers vested in the CMA under the Capital Market Law.

The CMA took into consideration the views of the public, specialists and interested parties when preparing the Instructions, and the main amendments that were made upon public consultation were the amendments to the definition of the Purchase Option, requirements for the independence of the price stabilisation manager and the period required for the price stabilisation manager to disclose the information related to the price stabilisation transactions.

The Instructions can be viewed via the following links:
Arabic:  التعليمات الخاصة بتنظيم آلية الاستقرار السعري للطروحات الأولية
English: The Instructions on the Price Stabilisation Mechanism for Initial Public Offerings