Saudi Market Authority Oversees IPOs

The Saudi Capital Market Authority has emphasized the importance of improving the procedures for building the order book in initial public offerings to ensure a more accurate representation of orders and to reflect the availability of genuine funds. This will be achieved through a new regulatory project extending over 30 days to refine the existing rules. The proposed amendments include narrowing the definition of financial soundness to only encompass funds that can be genuinely transferred within the specified timeframe, and requiring orders to be binding for payment at the end of the building period. Additionally, the amendments specify the timing of the underwriting commitment to purchase the offering shares and emphasize the need for clear, measurable future financial forecasts. The goal is to prevent non-executable orders and reduce the occurrence of order books that do not reflect true demand, thereby enhancing data reliability and ensuring that the offering price aligns with the actual funds behind the orders.

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