The Capital Market Authority has invited the trade, economy, and investment sector to provide opinions on the draft (Amendment of Rules Governing Special Purpose Entities and Securities Offering Rules, Continuing Obligations, and the Glossary of Terms Used in the Capital Market Authority’s Regulations and Rules) during the period from April 21 to June 5, 2026. It indicated that the project aims to deepen the sukuk and debt instruments market in the Kingdom by improving the regulatory framework for securitization operations to be a catalyst and enabler for them, and to enhance the diversity of investment products available in the market, supporting a diversified investor base.
It emphasized that the provisions apply to special purpose entities that have issued or intend to issue debt instruments. However, if a special purpose entity offers debt instruments in a public offering, the provisions contained in the Securities Offering and Continuing Obligations Rules and the Listing Rules apply to that entity. Similarly, if the special purpose entity offers debt instruments in a private or exempt offering, the provisions contained in the Securities Offering and Continuing Obligations Rules apply to that entity.
The draft amendment requires special purpose entities that have issued or intend to issue debt instruments to enable the entity and its board members to perform their duties in accordance with these rules and other relevant regulations and laws, and to provide them with the necessary information and documents to fulfill them.
The draft amendment stipulates that the sponsor of a special purpose entity that has issued or intends to issue debt instruments must meet the following requirements at all times: “Be a legal entity, comply with relevant regulations and laws related to its activity, and obtain the necessary approvals to establish the entity and offer debt instruments through it. The sponsor must not be a limited liability company if the special purpose entity has issued or intends to issue debt instruments through a public offering.”
The draft amendment prohibits the originator, any of its affiliates, or creditors from having an interest in the securitized assets, in the special purpose entity, or claims related to its assets, except for rights and claims fully and fairly disclosed in the entity’s documents, which include, but are not limited to, the prospectus or private placement document, as applicable. It requires board members to prepare a report on the ended fiscal year within one month from the end of each fiscal year.
It requires board members to prepare a signed report, which the entity must publish on the market’s website within (30) days from each profit distribution date specified in the terms and conditions of the debt instruments, if the special purpose entity offers asset-backed debt instruments in a public offering. The report must include disclosure of the following: “Distribution details and portfolio performance – Information on the securitized assets – Any material legal claims or proceedings – Securities offering information and use of offering proceeds – Any default or delay in payment – Main obligors (if any) – Any change in the sponsor’s and originator’s interest in the debt instruments – Credit enhancement providers (if any) – Any material developments during the reporting period – A list of documents accompanying the report.”
The draft amendment requires board members to prepare a signed annual report, which the entity must publish on the market’s website within three months from the end of the entity’s fiscal year, if the special purpose entity offers asset-backed debt instruments in a public offering. The report must include: “Cover page – Financial information of the main obligors (if any) – Information related to credit enhancement providers (if any) – Any material legal claims or proceedings – Data of parties related to the debt instrument – Any material information not previously disclosed during the reporting period – A list of documents accompanying the report.”
The draft amendment requires board members, within three months from the end of each fiscal year, to prepare annual financial statements for the special purpose entity in accordance with accounting standards approved by the Saudi Organization for Chartered and Professional Accountants, to be reviewed by the auditor in accordance with auditing standards approved by the Saudi Organization for Chartered and Professional Accountants, and signed by one of the board members. These must include, among other things, details of all outstanding debt instruments issued by the special purpose entity.
The draft amendment specifies standards for publishing the prospectus in a local newspaper. The announcement must include, at a minimum, the following: “The issuer’s name and commercial registration number. If the issuer is a special purpose entity, the name of the special purpose entity and its unified national number, and the sponsor’s name and commercial registration number.”
The draft amendment requires the issuer to immediately disclose
