The Draft Regulatory Framework for Equity Crowdfunding is Published by the Capital Market Authority for Public Consultation in Saudi Arabia
The Draft Regulatory Framework for Equity Crowdfunding is Published by the Capital Market Authority for Public Consultation in Saudi Arabia
Published At September 13, 2022The Capital Market Authority (“CMA“) Board decided to publish the draft of the regulatory framework for equity crowdfunding (“Draft”) for public comment for a period of (45) calendar days ending on 10/11/1443H, which corresponds to 09/06/2022G, as part of the CMA’s strategic objectives to develop the capital market. This decision was made based on the Capital Market Law issued by Royal Decree No. (M/30), dated 02/06/1424 H.
The Draft aims to encourage financial technology innovations in the capital market by establishing a regulatory framework for equity crowdfunding, including determining the required authorization for capital market institutions to carry it out, and to make it possible for businesses with a Financial Technology Experimental Permit to obtain the necessary authorization to practice it as a capital market institution, in accordance with international best practices.
The following are the Draft’s primary components:
a) Controlling share offerings through capital market organizations that are permitted to conduct arranging tasks when conducting securities crowdfunding.
b)Determining the standards for the safekeeping of client funds received by capital market institutions that are permitted to form and manage investment accounts as well as engage in securities crowdfunding.
The Draft is accessible at the following link:
Draft Regulatory Framework for Equity Crowdfunding
Almajed&Alrushud Law Firm.
