Saudi Capital Market Authority launches 2 year strategy to boost market transparency, global investment

RIYADH, Sept 15 (Arab News): Saudi Arabia's Capital Market Authority has unveiled its 2024-2026 strategic plan, emphasizing enhancing transparency, fostering financial technology and innovation, and diversifying financing options.
The undertaking will build on past successes while aligning with Saudi Vision 2030, which supports the national economy by facilitating an advanced financial ecosystem and attracting international investments.
Chairman Mohammed El-Kuwaiz highlighted the plan's bold objectives, which include creating a strong debt market and boosting the global competitiveness of the asset management industry.
"Our new strategy emphasizes the creation of a robust debt market, the enhancement of the asset management industry, and the attraction of increased investments to the national economy," El-Kuwaiz said during the Debt Markets and Derivatives Forum held in Riyadh on Sept. 8.
The approach underscores protecting investors' rights with efforts to raise transparency and ensure market integrity.
The blueprint comprises three pillars and over 40 initiatives designed to propel the market's growth and efficiency. One of the main focuses is enhancing the role of the stock market in raising capital.
To achieve this, the CMA plans to enable the listing of special purpose acquisition companies, known as SPACs, in the parallel market and facilitate the offering of Saudi depositary receipts. These initiatives aim to diversify investment opportunities and strengthen the market's appeal to domestic and foreign investors.
In developing the sukuk and debt instruments market, the CMA is setting up regulatory frameworks for green, social, and sustainable debt instruments, aligning with the growing global emphasis on environmental, social, and governance (ESG) principles.
By simplifying regulatory procedures for the offering, listing, and registration of debt instruments, the CMA aims to boost market activity and contribute to Saudi Arabia's broader financial sector development program.
This includes targeting an increase in the market value of the stock market to 80.8 percent of gross domestic product by 2025, a significant rise from the 66.5 percent recorded in 2019, and expanding the volume of debt instruments to 24.1 percent of GDP by the same year.
Investor protection forms a core element of the strategy, with a heightened focus on market transparency and supervision.
In light of recent increases in penalties and compensation for market violations, El-Kuwaiz emphasized the importance of safeguarding investor interests.
"Trust is vital for a successful market," he said, highlighting the CMA's efforts to develop procedures for class action compensation and enhance the process of handling complaints between financial institutions and their clients. These measures aim to build a transparent, accountable market environment that underpins investor confidence.
The CMA's plan also prioritizes empowering the financial market ecosystem, mainly through supporting and fostering financial technology, or fintech.
Recognizing the critical role of technology in driving competition and efficiency within the financial sector, the CMA intends to encourage the growth of fintech companies and enable open finance applications within the market framework. By doing so, the CMA seeks to integrate advanced technologies into the financial sector, streamlining operations and improving user experiences.