Experts suggest tweaks to Saudi listings mechanisms

The Saudi Capital Market Authority has proposed amendments to the mechanisms of IPOs in the financial market aimed at improving pricing quality, increasing transparency of the order book, reducing non-serious bids, and enhancing balance and risk among participating parties. The amendments focus on making the lead underwriter take greater responsibility in ensuring the success of the offering and committing to purchase all unallocated shares. They also aim to strengthen disclosures and raise the capital adequacy requirements for issuing companies. These reforms are expected to better determine the quality of offerings with a lesser impact on small and medium-sized companies, which may face greater challenges in complying with the new requirements. Additionally, the goal is to promote long-term market stability by improving pricing mechanisms, reducing non-supported demand driven by fake liquidity, and increasing transparency and investor confidence.

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