How You Start Trading in KSA Stock Exchange By TADAWUL

How To Become An Investor:

FOR THE MAIN MARKET:

Before making any investment decisions, investors should be aware of the risks and returns of investing in different types of securities. For more information, please visit our Knowledge Center. 

To trade at Tadawul, investors should first visit a member of the exchange to open an investment portfolio. Please contact a member of choice for more information. Please visit our Member Directory.

To Open An Investment Portfolio For Saudi, GCC and Resident:
Subject to the conditions and restrictions provided in Securities Depository Center Company (“Edaa”), the following investors are eligible for opening investment portfolios: 

• Natural persons.
• Joint stock and limited liability companies.
• Authorized persons.
• Charitable and social institutions and associations.
• Endowments.
• Licensed mutual funds. 
• Public institutions.
• Government funds.
• Any other person authorized by the Capital Market Law and its implementing regulations to own and trade securities.

DOCUMENTS REQUIRED FOR IDENTIFYING INVESTORS IN THE DEPOSITORY AND SETTLEMENT SYSTEM (SAUDI, GCC, AND RESIDENT):

1. Individuals:
   • For Saudis and GCC nationals: a copy of the identification card or family card.
   • For non-GCC nationals: a copy of valid residency license card (Iqama) and the passport.
2. Companies:
   • A copy of the commercial register.
   • A copy of the company’s by-laws or articles of association, its annexes and any amendment thereof.
   • A copy of the board of directors’ resolution approving the opening of an Investment Portfolio for the company and granting the power to those who will sign on behalf of the company.
   • Copies of the identification cards of members of the board of directors of the listed joint stock company.
3. Authorized Persons:
   • Copies of the commercial register, license and letter of engagement in business submitted to Tadawul.
4. Charitable, Social associations and institutions:
   • A copy of both, license and by-laws of charitable and social associations and institutions.
   • A copy of the resolution of the relevant public entity approving the investment.
   • A copy of the resolution of the charitable or social association or institution appointing the person who manages the Investment Portfolio and the Cash Account.
   • A copy of the identification card of the person appointed to manage the Investment Portfolio and Cash Account.
   • A copy of the Authority’s letter of approval issued for the charitable and social institutions and associations.
5. Endowment:
   • A copy of both, the title deeds of endowment and appointment of trustee.
   • A copy of the identification card of the trustee of the endowment.
6. Mutual Funds:
   • A copy of the license issued to establish the mutual fund.
   • A letter from the manager of the mutual fund stating the name of the person authorized to manage the Investment Portfolio of the fund.
   • A copy of the identification card of the person appointed to manage the Investment Portfolio of the fund.
7. Public institutions or government funds:
   • A copy of the statute or by-laws of the public institution or government fund.
   • A copy of the resolution issued by the public institution or government fund stating the name of the person authorized to manage its Investment Portfolio.
   • A copy of the identification card of the Saudis and GCC nationals or copy of residence permit (Iqama) and the passport of the non-GCC nationals authorized to manage the Investment Portfolio and Cash Account of the public institution or government fund.
   • A copy of the Authority’s letter of approval issued for the public institution or government fund.

FOR 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 follow:

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. 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.
8. Qualified foreign financial institutions.
9. Any other legal persons allowed to open an investment account in the Kingdom and an account at Securities Depository Center Company (“Edaa”).
10. 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.

FOR SWAP AGREEMENT:

Authorized Persons (APs) must submit the following documents to the Capital Market Authority (CMA) for approval before entering into swap agreements:

• A copy of the swap standard agreement to be signed, and evidence of its adherence to the conditions and requirements of the swap agreement.
• Declaration from the AP ensuring the enforcement and performance of all the conditions and requirements of the swap agreement
• Any other document that may be requested by the CMA.

FOR QUALIFIED FOREIGN INVESTORS (QFIS):

In order to access the Saudi Stock Exchange (Tadawul), Qualified Foreign Investors must be assessed and approved by an assessing authorized person prior to placing an order in the market through one of Tadawul’s members. 

To open an investment account for registered QFI, the following requirements should be submitted:

• QFI details form. 
• A copy of the certificate of incorporation or commercial register or an equivalent document. 
• Disclosure of the QFI’s investments in listed companies.