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Frequently Asked Questions

What is Nomu - Parallel Market?

Nomu is a parallel equity market with lighter listing requirements that serves as an alternative platform for companies to go public. The investment in this market is restricted to Qualified Investors.

Why is Tadawul creating Nomu - Parallel Market?

Launching Nomu - Parallel Market is a step towards fulfilling Tadawul’s plans to further develop the capital market. It is also in alignment with the objectives of the 2030 Vision which stress the importance of developing a more advanced capital market open to the world, allowing greater funding opportunities and stimulating economic growth. This will in turn generate more diverse investment opportunities and instruments for all capital market participants.

What are the differences between the Main Market and Nomu - Parallel Market?

  Main Market Nomu – Parallel Market
Minimum Market Cap SAR 100 million SAR 10 million
% Offered At least 30% At least 20% (with no single investor owning more than 5%)
Public Shareholders At least 200

If the expected aggregate market value for all shares to be listed exceeds SAR 40 million, at least 50 public shareholders are required.

If the expected aggregate market value for all shares to be listed is less than SAR 40 million, at least 35 public shareholders are required.

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 90 calendar days 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 90 calendar days 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 as per the below criteria:

  1. Authorized Persons act for their own account
  2. 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
  3. 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”)
  4. Government-owned companies either directly or through a portfolio managed by a person authorized to carry out managing activities
  5. Companies and funds established in a member state of the Cooperation Council for the Arab States of the Gulf
  6. Investment Funds
  7. Qualified Foreign Investors
  8. Any other legal persons allowed to open an investment account in the Kingdom and an account at Securities Depository Center Company (“Edaa”)
  9. 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.
  •  holds professional certificate that is related to securities business and accredited by an internationally recognized entity.

     10.Any other persons prescribed by the Authority

     11.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.

 

What are Nomu - Parallel Market's main characteristics?

  • 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)

What are the listing requirements for Nomu - Parallel Market?

Offering to Qualified Investors takes place first, then listing is conducted. The Offering and Listing process takes the following criteria into consideration:

  • The issuer must be a Saudi joint stock company or a joint stock company which the majority of its capital is owned by citizens of a member state of the Cooperation Council for the Arab States of the Gulf and enjoys a nationality of one of them
  • Minimum market cap of SAR 10 million
  • 20% of shares owned by the qualified public; with no single investor owning more than 5%
  • Minimum 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
  • If the expected aggregate market value for all shares to be listed exceeds SAR 40 million, at least 50 public shareholders are required. If the expected aggregate market value for all shares to be listed is less than SAR 40 million, at least 35 public shareholders are required

Is Nomu- Parallel Market dedicated for SMEs?

Nomu - Parallel Market will open new investment opportunities to all types of companies – including SMEs - which play a key role in leveraging the national economy and accelerating development.

Who are Non-Resident Foreign Investors?

  1. Qualified foreign investors according to the Rules for Qualified Foreign Financial Institutions Investment in Listed Securities.
  2. The ultimate beneficiary in a Swap agreement with an authorized person.
  3. 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.
  4. 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.

 

 

Which Markets can the Non-Resident Foreign investor trade in?

The Non-Resident Foreign Investor can trade only in Nomu – Parallel Market.

What are the procedures to open a Depository Center Account for Non-Resident Foreign Investor ?

An IFI can open a Depository Center account through the local Authorized Person after completing the following requirements:
• Fill the Edaa (Depository Center) account form.
• Copy of passport, certificate of incorporation, commercial register, or equivalent documentation.

 

How can the Exchange Member submit the Depository Center Account’s requirements?

The Authorized Person should send the requirements to the Edaa Center in both printed and electronic forms. The electronic copies should be sent to the following email address: cc@edaa.com.sa 

How are investment limitations of listed companies disclosed?

Investment limitations set forth in the articles of association (by-laws of the listed company, or any instructions issued by the supervisory or regulatory authorities to which the listed company is subject to), will be available under each issuer’s profile page; under the label “investment limits”. 

Where will foreign ownership information be available, and how frequent is it updated?

Foreign ownership information will be available on Tadawul website, and it will be updated on daily basis after market close.

How is foreign ownership information displayed on Tadawul’s website?

Foreign ownership reports will enclose:
Maximum ownership percentage per issuer and existing ownership percentage per issuer by all foreign investors.
 
The foreign ownership information can be found in the “Reports & Publications” web page, under the “Foreign Ownership”. 

What is the investing criteria for the Natural Person as Non-Resident Foreign Investor?

  • 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.