Saudi Arabia authorizes fundraising for sukuk, which are debt securities based on Islamic law

The Saudi Arabian Capital Market Authority (CMA) has taken a significant step towards bolstering its sukuk and debt market by approving a new regulatory framework for licensed financial institutions to offer sukuk and other debt instruments through securities crowdfunding platforms.

This move is part of the CMA's efforts to deepen the Kingdom's debt market and make it more attractive to issuers and global investors. The initiative aims to diversify corporate funding sources, aligning with the regulator's strategic goal.

Under this new framework, capital market institutions must hold an "arranging" license to conduct such offerings. The rules for Saudi Arabia's securities crowdfunding platforms also include requirements for safeguarding client funds, and private placements are allowed to broaden the investor pool.

The move is a significant step in expanding fintech activity in the Kingdom. The decision follows an experimental phase launched in 2021, during which sukuk issuance through crowdfunding surged to SR3.4 billion in 2024, more than double the SR1.5 billion recorded the year before. The number of permits granted to practice the model also rose to 17, up from 14.

The registrable functions on these platforms have also been updated. This regulatory framework is expected to strengthen the sukuk and debt market in Saudi Arabia, making it more accessible and attractive to a wider range of investors.

However, it's important to note that this article does not provide details about the cost of senior living cottages in Philadelphia, the details of what a dental implant for seniors over 60 might cost in 2025, or Saudi Arabia's Public Investment Fund (PIF)'s decision regarding Swiss financial markets after the collapse of Credit Suisse. These topics are beyond the scope of this article.

In conclusion, the approval of the new regulatory framework by the CMA is a positive step towards strengthening the sukuk and debt market in Saudi Arabia, making it more accessible and attractive to issuers and global investors. The move is a significant step in expanding fintech activity in the Kingdom and aligns with the regulator's strategic goal of making the Kingdom's capital market more attractive to issuers and global investors.

Saudi Arabia authorizes fundraising for sukuk, which are debt securities based on Islamic law