Saudi joint stock companies had their beginnings in the mid 1930’s, when the
"Arab Automobile” company was established as the first joint stock company. By
1975 there were about 14 public companies. The rapid economic expansion, besides
the Saudisation of part of the foreign banks capital in the 1970’s led to the
establishment of a number of large corporations and joint stock banks.
The market remained informal, until the early 1980’s when the government
embarked on forming a regulated market for trading together with the required
systems. In 1984, a Ministerial Committee composed of the Ministry of Finance
and National Economy, Ministry of Commerce and Saudi Arabian Monetary Agency
(SAMA) was formed to regulate and develop the market. SAMA was the government
body charged with regulating and monitoring market activities until the Capital
Market Authority (CMA) was established in July 2003 under the Capital
Market Law (CML) by Royal Decree No. (M/30). The CMA is the sole regulator and
supervisor of the capital market, it issues the required rules and regulations
to protect investors and ensure fairness and efficiency in the market.
Formation of Saudi Stock Exchange (Tadawul)
The Council of Ministers approved on the 19th of March 2007, the formation of The Saudi Stock
Exchange (Tadawul) Company. This was in accordance with Article-20 of
the Capital Market Law establishing Tadawul as a joint stock company.