Nomu - Parallel Market
A parallel equity market with lighter listing requirements that serves as an alternative platform for companies to go public, and the investment in this market is restricted to Qualified Investors.
The main objectives of establishing Nomu - Parallel Market:
- Additional source of funding for issuers to access capital.
- Increased diversification and deepening the capital market.
- New market with lighter requirements.
- Restricted to Qualified Investors.
- Possibility of transition to Main Market after new filing process with the Capital Market Authority (CMA).
Criteria for issuers:
|Nomu - Parallel Market||Criteria|
|Admission Document||Modified, less stringent application|
|Offering Process||Simpler offering process, similar to a private placement|
|Transition to Main Market||The company must:
|Financial Disclosure||Disclosure of quarterly financial statements within 45 calendar days from the end of the period and year-end financial statements within 3 months from the end of the period|
|Material Changes Disclosure||Similar to the Main Market|
Offering to Qualified Investors takes place first, then listing is conducted. The Offering & Listing process takes the following criteria into consideration:
- The issuer must be joint stock company.
- Minimum market cap of SAR 10 million.
- At least 20% of the class of shares that are the subject of the application will be owned by the public at the time of listing.
- Min 1 year of operational and financial performance.
- Financial advisor mandatory, legal advisor optional.
- Annual audited financial statements.
- Quarterly reviewed financial statements.
- Disclosure of material information.
- No profitability track record required.
- Lock Up Period: 100% of pre-offering investor shares for one year.
- At least 50 public shareholders are required at the time of listing.
The key differences between Main Market and Nomu - Parallel Market:
|Main Market||Nomu - Parallel Market|
|Minimum Market Cap||SAR 300 million||SAR 10 million|
|% Offered||At least 30%||At least 20%|
|Public Shareholders||At least 200||
At least 50
|Continuous Obligations||Standard disclosure requirements. Disclosure of quarterly financial statements within 30 calendar days from the end of the period and year-end financial statements within 3 months from the end of the period||
Lighter financial disclosure requirements (with regards to time permissible to disclose)
Disclosure of quarterly financial statements within 45 calendar days from the end of the period and year-end financial statements within 3 months from the end of the period
|Daily Fluctuation Limits||±10%||±20%|
Who can invest in Nomu - Parallel Market?
Given Nomu - Parallel Market is restricted to Qualified Investors , Authorized Persons (APs) must determine who is eligible. For the purpose of Nomu - Parallel Market and Nomu - Parallel Market offering, Qualified Investors are defined per the below criteria:
- Authorized Persons act for their own account.
- Clients of a person authorized by the Authority to conduct managing activities provided that this Authorized Person has been appointed as an investment manager on terms which enable it to make decisions concerning the acceptance of an offer and investment in Nomu - Parallel Market on the client’s behalf without obtaining prior approval from the client.
- The Government of the Kingdom, any government body, any supranational authority recognized by the Authority or the Exchange, and any other stock exchange recognized by the Authority or Securities Depository Center Company (“Edaa”).
- Government-owned companies either directly or through a portfolio managed by a person authorized to carry out managing activities.
- Companies and funds established in a member state of the Cooperation Council for the Arab States of the Gulf.
- Investment Funds.
- Non-resident foreigners permitted to invest in the Parallel Market and who meet the requirements stipulated in the Guidance Note for the investment of Non-Resident Foreigners in the Parallel Market.
- Qualified foreign financial institutions.
- Any other legal persons allowed to open an investment account in the Kingdom and an account at Securities Depository Center Company (“Edaa”).
- Natural persons allowed to open an investment account in the Kingdom and an account at Securities Depository Center Company (“Edaa”), and fulfill any of the following criteria:
- has conducted transactions in security markets of not less than 40 million Saudi riyals in total, and not less than ten transactions in each quarter during the last twelve months.
- his net assets is not less than 5 million Saudi Riyals.
- works or has worked for at least three year in the financial sector.
- holds the General Securities Qualification Certificate which is recognized by the Authority "CME-1".
- holds professional certificate that is related to securities business and accredited by an internationally recognized entity.
11. Any other persons prescribed by the Authority.
Non-resident foreigners whom are allowed to invest in Nomu-Parallel Market:
- Qualified foreign investors according to the Rules for Qualified Foreign Financial Institutions Investment in Listed Securities.
- The ultimate beneficiary in a Swap agreement with an authorized person.
- legal person allowed to open an investment account in the Kingdom and an account at the Depositary Center and is licensed or incorporated in a jurisdiction that applies regulatory and monitoring standards equivalent to those applied or accepted by the Authority in accordance with the list of jurisdictions issued by the Authority.
- Natural person holding the nationality of a country that applies regulatory and monitoring standards equivalent to those applied or accepted by the Authority in accordance with the list of jurisdictions issued by the Authority, and resides in such countries, and fulfills any of the criteria:
- Has conducted transactions in security markets of not less than 40 million Saudi riyals in total and not less than ten transactions in each quarter during the last twelve months.
- The average size of securities’ portfolio shall exceed 10 million Saudi riyals during the last twelve months.
- Holds a professional certificate in securities recognized by the Authority or an internationally certified jurisdiction.
Non-resident foreign investor to submit this Form along with all the required documents to the designated AP.
AP sends the completed documents to Securities Depositary Center (Edaa) Operations for their review and approval.
Edaa Operations respond to AP with the result via email.