The CMA approves the Regulatory Framework for Offering Special Purpose Acquisition Companies (SPACs) in the Parallel Market

The Capital Market Authority's (CMA's) Board approved the regulatory framework for the offering of Special Purpose Acquisition Companies (SPACs) in the Parallel Market (Nomu), through amendments to the Implementing Regulation of the Companies Law for Listed Joint Stock Companies, the Rules on the Offer of Securities and Continuing Obligations, and the Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority, to be effective from the date of its publication.
The amendments aim to diversify the available investment products and encourage private sector companies to pursue listing, thereby contributing to meeting financing needs, increasing the number of offerings, and enhancing liquidity levels in the Parallel Market. The amendments also provide investors with an opportunity to access non-listed companies that were previously difficult to invest in directly.
The amendments include regulating the conditions and requirements for the registration and offering of shares of SPACs in the Parallel Market. Among the key requirements are that the company must be established by a sponsor and that its shares must be redeemable at the option of shareholders. The amendments grant shareholders the right to redeem their redeemable shares, including redemption for a cash amount from the escrow account in proportion to their shareholding in the SPAC, in specific cases, including where the SPAC completes a transaction with a target company and the shareholder votes against approving such transaction. The amendments also require that the company’s capital following the offering shall not be less than SAR 100 million, thereby supporting the enhancement of efficiency and attractiveness of the Parallel Market to investors.
The amendments also set out the conditions for completing an acquisition or merger transaction between a SPAC and the target company, in a manner that enhances governance and protects investors’ rights. These conditions include that the sponsor, or an investment fund managed by the sponsor, must not hold, directly or indirectly, any shares or ownership interests in the target company, and that the value of the target company must represent at least 80% of the amounts deposited in the escrow account. In addition, the shareholding of the SPAC’s shareholders in the target company following completion of the transaction must not be less than 30%.
From a timeline perspective, the amendments require a SPAC to complete the transaction within a period not exceeding 24 months from the date of its listing on the Parallel Market, with the possibility of an extension for an additional 12 months subject to the approval of the Extraordinary General Assembly. The sponsor and its affiliates may not participate in voting on the extension resolution, and the CMA must be notified accordingly.
The approval of the regulatory framework comes as a continuation of the CMA’s regulatory efforts to enhance the diversity of investment products and expand the investor base in the Saudi capital market, in addition to providing financing instruments that support economic growth.
The CMA had published, on 8 April 2025, the draft “Regulatory Framework to Allow Offering Special Purpose Acquisition Companies (SPACs) on the Parallel Market” on the Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform) and the CMA's website for public consultation for a period of (30) calendar days.
The amended Implementing Regulation of the Companies Law for Listed Joint Stock Companies, the amended Rules on the Offer of Securities and Continuing Obligations, and the amended Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority can be accessed through the following links:
The Implementing Regulation of the Companies Law for Listed Joint Stock Companies.
The Rules on the Offer of Securities and Continuing Obligations.
The Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority.