Saudi regulator pushes modest reforms as market depth remains a challenge

Mazen Al-Sudairi, appointed chairman of Saudi Arabia’s Capital Market Authority, has rolled out two immediate measures: capping public money-market funds’ foreign holdings at 5% of net assets and demanding that listed firms tie board compensation to performance. These actions follow a Corporate Governance Center study that found variable board pay rare and government-linked firms over-paying directors. Although the moves are swift and legislative-free, they do not solve Tadawul’s structural problems, such as shallow liquidity, heavy sector concentration and a lack of trust that led the benchmark index to fall 12.8% in 2025.

IPO volume rose 41% year-on-year, but many deals primarily transferred existing shares rather than issuing new capital, prompting the CMA to examine bank pricing practices. Al-Sudairi must decide whether the exchange will mainly serve as an exit vehicle for family-owned businesses or as a financing engine for new corporate growth.