SAUDI ARABIAN FINANCIAL services reached a crucial point on July 31 2003, and it is only now that the dust has settled sufficiently to appraise the effects. That day the Capital Market Law was promulgated by royal decree, among other things creating a new body, the Capital Market Authority, to oversee the Saudi markets and investment industry.
One of the many initiatives that would follow the establishment of the CMA was a requirement that all Saudi financial institutions hive off their asset management, brokerage and investment banking units into separate entities. In the wake of that the regulator set about issuing licences for established players and new ones that wanted to set up these investment units. It swiftly became clear that it was going to issue plenty. From eight authorized persons – the formal title for licensed bodies – at the end of 2005, there were 45 by the end of 2006, 80 by 2007 and 110 by the end of 2008. A peak was hit that year – 12 more were issued in 2009, but 12 were revoked, leaving the final number the same. Although the CMA does continue to issue new licences, such as to Lazard Saudi Arabia last June and QInvest in January, today the AP list runs to a more modest 92 and it is expected to come down from there.
