Regulatory Alerts2012-12-30
Capital Market Authority Prudential Rules
The Capital Market Authority of Saudi Arabia issued these Prudential Rules to establish comprehensive financial prudence standards for licensed capital market institutions. The framework mandates minimum Tier 1 and total capital adequacy ratios of six percent and eight percent respectively, while prescribing specific capital base compositions, risk-weighted asset calculations across credit, market, and operational risks, and tailored expenditure-based capital requirements based on institutional business scope. Institutions must continuously comply with these capital and liquidity thresholds, report their financial positions to the Authority, and apply standardized methodologies for credit risk mitigation, counterparty exposures, and concentration limits.