Saudi Arabia’s Capital Market Authority (CMA) has approved a regulatory framework enabling capital market institutions with an “Arranging” licence to offer sukuk and other debt instruments via securities crowdfunding platforms, moving the model from pilot to formal regulation.
The changes follow an experimental phase launched in Q2 2021. Under the new rules, only institutions holding the appropriate licence, or firms transitioning from the FinTech Lab, may conduct such offerings. FinTech Lab participants can continue operating under their current permits until they expire, after which they must switch to the full licence if continuing the activity.
Amendments were also made to the Rules on the Offer of Securities and Continuing Obligations, the Rules for Special Purpose Entities, and the Capital Market Institutions Regulations, all effective upon publication. These updates tighten safeguards, including client-fund protection, registrable roles, and conditions for private placements aligned with capital market standards.
The pilot produced strong results in 2024: sukuk issuances over crowdfunding platforms surged to SAR 3.4 billion, more than double the SAR 1.5 billion recorded in 2023, and the number of permits issued rose to 17 from 14.
The framework applies to exempt offerings outlined under CMA rules, including private placements. It also defines specific operational requirements such as registrable functions and client-fund facilities for arranging-licensed institutions. That includes restrictions to prevent proceeds from being used for lending, investment, or debt repayment, and mandates disclosure protocols, such as a timely summary of offerings, credit checks on sponsors, offering document transparency, and investor protections like cancellation windows.
The move supports CMA’s strategic goal to deepen the debt instrument market, open up funding routes for corporates, and broaden investor access through fintech innovation.
