Summary
A comprehensive legal guide to Saudi Arabia's stock market, covering the regulatory framework, listing requirements, market offences, and investor protection mechanisms.
The Legal and Institutional Framework of TASI
Capital Market Authority (CMA): The primary regulator and legislative authority responsible for issuing listing rules, supervising disclosures, and enforcing compliance across all participants in Saudi Arabia's capital markets.
Saudi Exchange (Tadawul): The operational entity that manages the trading, clearing, and settlement infrastructure for equities, sukuk, and other listed securities.
Committee for the Resolution of Securities Disputes: The specialist judicial body with exclusive jurisdiction over disputes arising from capital market activities — including investor claims against issuers and enforcement actions by the CMA.
Listing Requirements for TASI
The applicant company must be a Saudi joint-stock company.
The company must have a minimum expected market capitalisation of SAR 300 million at the time of listing.
A minimum free float of 30% of the company's shares must be offered to the public.
The company must have operated in the same core business for a minimum of three complete financial years and must be able to present audited financial statements for each of those years.
Market Offences and Sanctions
Market manipulation: Artificial manipulation of securities prices — whether through wash trading, dissemination of misleading information, or coordinated trading activity — is a serious criminal offence. Sanctions include imprisonment and financial penalties that may be set at a multiple of the profits generated by the manipulation.
Insider trading: Dealing in securities on the basis of material non-public information is among the most serious capital market offences under Saudi law. Both the individual trader and any person who communicated the inside information may face criminal liability.
Investor Protection
Shareholders have the right to challenge general assembly resolutions that are adopted in contravention of the Companies Law or the company's articles of association.
Class actions: The Capital Market Law permits groups of investors who have suffered loss as a result of a company's or a director's misconduct to bring collective compensation claims before the Committee for the Resolution of Securities Disputes — providing an effective enforcement mechanism for retail investors.
Conclusion
Investing in or through Saudi Arabia's capital markets requires a level of legal awareness that matches — and in some respects exceeds — the financial knowledge required. Faisal Siddiqui Law Firm serves as the bridge that enables investors and companies to navigate the capital markets with confidence and legal certainty.