RIYADH: In order to make Special Purpose Entities more appealing for issuing debt instruments and serving as investment units, the Saudi Arabian Capital Market Authority is working to strengthen their governance. SPEs are autonomous financial and legal organisations founded for particular funding reasons and licensed by the CMA. They dissolve after their goals are fulfilled.
The recently proposed revisions to the CMA aim to increase the number of eligible issuers while maintaining compliance with current rules. In addition, the modifications would allow SPEs to supplement the current frameworks for public and private issuance by providing debt instruments through exempt offers. This action supports the expansion of the asset management sector and is consistent with the regulator’s objectives of growing the market for sukuk and debt securities.
By increasing the number of debt issuers through Special Purpose Entities, the draft will also help diversify issuances and deepen the market for sukuk and other debt instruments. These actions will improve liquidity and open up new investment opportunities, the CMA said in a statement. The number of organisations more than doubled from 464 in 2018 to 945 by the end of 2024, demonstrating the current boom in SPE use.
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