Capital Market Authority Chairman tells Al Arabiya Business of a 90-day reform plan; retail allocation in IPOs to rise to 30%, alongside adjustments to offerings, short selling and algorithmic trading

Riyadh | BETH

Capital Market Authority Chairman Mazen Al-Sudairi has revealed a 90-day implementation plan to address structural challenges in the Saudi capital market, in a move that goes beyond amending individual regulations to recalibrating the relationship between offerings, investors, liquidity and modern trading mechanisms.

In his first media interview since assuming the chairmanship, with Al Arabiya Business, Al-Sudairi said the goal is for the market to become a true reflection of the Saudi economy and a place for citizens to save, while strengthening fairness, efficiency and confidence.

IPO Success Is Not Measured by Oversubscription

One of the most significant shifts concerns initial public offerings. Al-Sudairi said that high oversubscription levels are not, by themselves, a measure of a successful offering, and that the real test extends to the stock’s performance after listing, the quality of pricing and genuine investment demand.

He said the Authority is redefining the responsibilities of companies, advisers and bookrunners, and that the retail allocation, which often stands at around 10%, should generally rise to about 30%, with flexibility depending on the size of the offering.

Algorithmic Trading Under Scrutiny

The second track is technological. The Authority has proposed a new framework for algorithmic trading aimed at improving the efficiency of automated trading while preventing practices that could affect market stability or investor interests. The consultation period ends on October 24, with implementation of the provisions scheduled to begin on November 1, 2026.

The review also includes short selling, recognizing its importance to the market while placing it within controls designed to prevent it from becoming a tool that could negatively influence price movements.

BETH Analysis

The most important element of the plan is not the increase in retail allocation or the regulation of algorithms, each viewed separately.

The Saudi market is moving from expanding the size of the market to improving the quality of the market.

The new measure no longer appears to be: How many companies were listed? How many times was an IPO covered?

Rather: Was the price fair? Did the investor stay? And does the market reflect the real economy?

This is where the significance of the next 90 days lies:

Rebuilding confidence before increasing the numbers.