The Board of Directors of the Capital Markets Authority approved the extension until the end of 2027 of the exemption of financial fees collected for the institution covered by the fees of the Saudi Stock Exchange (Tadaul) and the Securities Depository Center (Edar) for requests to offer debt instruments, provided that the issuer or issuers have an existing credit rating and are disclosed to the public by a rating agency licensed by the Capital Markets Authority in accordance with certain controls.
The Authority’s Board of Directors issued a decision on July 1, 2020 that issuers wishing to make a public offering of a debt instrument will continue to be exempted until the end of 2025 from paying financial fees levied by the Authority when filing an application for the registration of a debt instrument, when considering an application for the registration of a debt instrument, and when registering a debt instrument.
Development of sukuk market
According to the authorities, the decision aims to support and develop the sukuk and debt markets and encourage the participation of issuers, which will contribute to increasing the attractiveness of the market and widening the base of domestic and foreign issuers and investors, as well as increasing the ability of companies to obtain long-term financing at competitive costs, as well as increasing the quality of issuance, improving the level of disclosure, and encouraging the acquisition of corporate credit ratings that increase investor confidence.
The Capital Markets Authority identified the offerings subject to this decision as those offerings of debt instruments to non-governmental entities that are listed by the issuer or by an issuer that has a credit rating by an authorized credit rating agency for the issuer. However, capital market authorities will only be responsible for financial consideration for a maximum of two issues per issuer, provided that the ratings are up-to-date and publicly available.
private placement request
For private placement requests covered by this decision, the Authority designated them as offerings of debt instruments to non-governmental entities offered privately to issuers or issuers with a credit rating by a credit rating agency approved by the Authority and whose size does not exceed 500 million riyals. However, only a maximum of two stocks per issuer, provided this classification is current and publicly available.
The group explained that it will cover “transaction” and “deposit” fees on certain total public and private placements, up to 5 million riyals per year until 2027, provided that placement applications submitted in excess of this cap will be considered.
The Board of Directors of the Capital Markets Authority has approved the exemption of financial fees levied on behalf of the Capital Markets Authority and the extension of the burden of fees of the Saudi Stock Exchange (Tadaul) and the Securities Depository Center (Edar) on debt issuance requests until the end of 2027, subject to certain regulations, provided that the issue or security has received a valid and publicly confidential credit rating from a rating agency licensed by the Capital Markets Authority.
On July 1, 2020, the Authority’s Board of Directors had issued a decision to continue exempting companies wishing to publicly issue debt instruments from paying financial fees until the end of 2025, which are collected when applying for the registration of a debt instrument, during the consideration of an application for the registration of a debt instrument, and at the time of registration of a debt instrument.
Development of sukuk market
According to the authorities, this decision is aimed at promoting and developing the entry of issues into the market by facilitating entry into the sukuk and debt markets, increasing the attractiveness of the market, increasing the ability to raise long-term funds at competitive costs, encouraging companies to obtain credit ratings, as well as improving the quality of issues, improving the level of disclosure of companies and increasing investor confidence.
The Capital Markets Authority has designated the products subject to this decision as debt instruments for issuers or non-governmental entities listed as issuers that have obtained a credit rating from a credit rating agency licensed by the Authority. But only if this rating is valid and published. The Capital Markets Authority will be responsible for finance charges on up to two issues per issuer.
Request a private offering
Private offerings covered by this decision are defined by the Authority as private offerings to issuers of non-governmental debt instruments or issues with a credit rating from a credit rating agency authorized by the Authority, provided that this rating is valid and published, not exceeding 500 million riyals, and subject to a maximum of two issuances per issuer.
It has been clarified that “Tadawul” and “Edar” fees will be paid for the total amount of designated public and private offerings up to a maximum of 5 million riyals per year until 2027, and that applications for public offerings submitted in excess of this limit will also be considered.
