Regulatory Alerts2018-08-06
Instructions on the Price Stabilisation Mechanism in IPOs
The Capital Market Authority of Saudi Arabia issues these Instructions to regulate price stabilisation activities for shares of companies newly listed on the Exchange following an initial public offering. The rules cap over-allotment at 15 percent of offered shares, mandate detailed prospectus disclosures and periodic reporting by the price stabilisation manager, and restrict trading prices to the offer or 2 percent of the last trade price. Additionally, designated managers must maintain specific accounts, exercise the mechanism in the issuer's interest, comply with targeted exemptions from market conduct regulations, and retain transaction records for at least ten years.
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