Saudi Arabia’s Capital Market Authority approves tighter IPO underwriting, order verification and forecast disclosure rules

Saudi Arabia’s Capital Market Authority (CMA) has approved initial public offering (IPO) rules strengthening underwriting commitments, linking participation orders to actual liquidity and expanding issuer disclosures. The provisions follow the September 2026 consultation and apply from publication. Underwriting agreements must be executed and effective before book building begins, with the obligation to purchase all offered shares taking effect when book building starts. If the underwriter’s ownership would cause listing requirements not to be met, the shares cannot be listed and the underwriter must purchase the entire offering. Participation orders must reflect investors’ actual available liquidity, with financial capacity verified using only cash or cash equivalents. Orders must become binding for payment no later than the subscription payment deadline specified in the prospectus. Issuers must disclose forward looking statements and forecasts, including financial performance indicators, in the prospectus and registration document. These must cover the remainder of the latest financial period included in those documents and at least the following financial year. The statements and forecasts must be clear, not misleading and based on reasonable, measurable grounds. Disclosure must explain the preparation methodology, material assumptions and key risks that could affect the forecasts or cause actual results to differ. Financial advisers must exercise professional due diligence to form a reasonable opinion on the statements and forecasts.