Saudi Arabia has undertaken substantial capital market reforms in 2026, notably by eliminating the Qualified Foreign Investor (QFI) framework. This change, effective February 2026, removes prior restrictions that required foreign investors to meet specific qualifications, such as having at least $500 million in assets under management, to trade on the Saudi market. Now, any non-resident foreign investor can directly invest in Saudi-listed securities, simplifying market entry without additional Capital Market Authority (CMA) approval beyond standard account-opening procedures. This move aims to deepen liquidity and increase international participation, as foreign ownership of Saudi-listed equities was previously around 6.8%, compared to higher percentages in other emerging markets.
In addition to broadening access, Saudi Arabia has also prioritized the development of its derivatives market. The Saudi Exchange has introduced exchange-traded derivatives products, including MT30 Index Futures and Single Stock Futures (SSFs). The MT30 Index Futures are cash-settled contracts based on the MSCI Tadawul 30 Index, designed for hedging and tactical exposure. Single Stock Futures are based on large-cap Saudi equities like Saudi Aramco and Al Rajhi Bank, allowing investors to manage exposure to individual stocks without trading the underlying shares. Derivatives trading occurs in dedicated sessions from 9:00 AM to 3:30 PM KSA time, providing early price signals.
The CMA's reforms also include efforts to enhance the debt and securitization market. In April 2026, the CMA proposed amendments to rules for Special Purpose Entities (SPEs) and public offerings of asset-backed securities (ABS). These amendments would introduce expanded disclosure requirements for originators and securitized asset pools, mandatory credit ratings for public ABS offers, and new periodic reporting obligations. Furthermore, the CMA proposed in June 2026 to update capital adequacy requirements for securities firms, moving from a uniform model to one more proportionate to actual business risk, which could reduce operational barriers for advisory and asset management firms. These changes aim to make Saudi Arabia a more competitive listing and capital flow destination.
