Saudi finance minister calls for quicker regulatory reforms
Al-Jadaan highlights significant changes in the Kingdom’s financial sector since 2016
We have a very strong economy that has actually passed the test of multiple shocks over the last seven years.
Saudi Arabia has shown great ambition in financial reforms but could pick up a faster pace, according to the Minister of Finance, Mohammed Al-Jadaan.
Speaking during a panel session at the third Saudi Capital Market Forum, Al-Jadaan urged Mohammed El-Kuwaiz, chairman of the Saudi Capital Market Authority, and Tadawul to expedite compliance while emphasizing the need for predictability and stability in compliance-related changes. The minister highlighted the significant changes in the regulatory and legal landscape since 2016, particularly in capital markets and the financial sector.
“I think we are not fast enough, so please, Mr. El-Kuwaiz and even Tadawal, who have as an exchange their own regulatory requirements, you are not fast enough, but also for their defense and for the defense of government really at large, you need also predictability and stability in years,” Al-Jadaan said.
He added: “The regulatory reforms that have happened at the macro level, provide a lot more transparency, predictability that is needed.”
Throughout the session, Al-Jadaan underlined key elements to enable and enhance working together, starting with having a “very strong regulatory framework” to provide certainty
and predictability for investors and issuers.
Another element was an issuerfriendly approach, which denotes the need for advisory services and market participants who can inform issuers and investors regarding what users can’t control within the government.
“For example, trying to convince the Capital Market Authority to make the fees that potentially may encourage investors and issuers to join more reasonable and more comparable,” Al-Jadaan explained. He continued: “You need basics like the yield curve, which relies on a clear sovereign yield curve in an extended period of time ... and the government have actually done that, have worked over the last five years to make sure that there is
a very clear yield curve over one year, three years, five years, and 10 years, and beyond that, to 50 years, because it is the benchmark.” Additionally, Al-Jadaan conveyed a message to key players to attract them to invest in Saudi Arabia through several points, stating that the government is transparent and unified in its understanding of what needs to be done and how to accomplish it.
He also made clear there is regular communication between the government, the private sector, investors, and other stakeholders to stay updated on expectations, offerings, and internal alignment regarding actions to be taken. “I can assure them that we have a very strong economy that has actually passed the test of multiple shocks over the last seven years and has continuously, since 2020, the COVID year, been growing in a very robust, strong way,” the minister continued.
He added: “You have a very strong rating agency, rating level at A+, with actually an outlook that is either stable or positive, and you have a currency that is baked to the dollar, so that is de-risking the currency exchange risk.” Reflecting on the effectiveness of financial regulatory reforms, Sarah Al-Suhaimi, chairperson of Saudi Tadawul Group, highlighted during the opening remarks of the forum the significant increase in the number of qualified foreign investors in the Kingdom since 2017, reaching nearly 4,000 by the end of last year, “a growth rate unmatched by most emerging markets.”
The robust liquidity, advanced infrastructure, and varied investment prospects in the Saudi capital market drive this surge.
“These factors meant that last year, the portion of active emerging market funds investing in the Kingdom has more than doubled. As we look to the future, the Saudi capital market is set on becoming a top global market,” Al-Suhaimi said.
She continued: “At Saudi Tadawul Group, our strategic framework is centered on diversification, opening up our wealth possibilities beyond our growing equity market into debt, derivatives, commodities, and more. We are committed to enhancing our offerings and fostering increased international participation.” Furthermore, the Kingdom’s finance minister noted that despite Saudi Arabia being a young country, it has made significant progress in its promised transformation over the past seven years. “Showing success, showing delivery, showing commitment during good and rough times, and will continue. Will continue until 2030 and will continue
beyond 2030. A journey that we want to share with the world and we want to help bring stability to the world and bring business and investment opportunities to the world,” Al-Jadaan said.
The minister continued: “We are committed, we are very serious about it, and we will not blink, and on the geopolitical side, we are committed to de-escalating. Saudis have shown very clearly their commitment to peace and stability and will continue to press on that, working with our friends and allies.”
Global financial experts gathered in Riyadh on Monday to discuss the future of finance, evolving strategies, and innovative ideas to boost the sector’s growth at the third Saudi Capital Market Forum. The two-day event, organized by Saudi Tadawul Group and held under the theme “Powering Growth,” will serve as a nexus for transformative dialogue and innovation, fostering the convergence of emerging markets with established financial frameworks. Emphasizing the pivotal role of such events, Mahmoud Khairy, an economist and policy adviser, told Arab News that “the forum facilitates essential dialogue among key stakeholders, fostering collaboration and innovation within the financial sector.”
He added: “By providing a platform for discussions on innovative financial instruments and strategies and fostering strategic collaborations, the event contributes to the overall efficiency and attractiveness of the capital markets.”
Khairy said the occasion also aligns with Vision 2030’s goals by promoting transparency and good governance and attracting domestic and international investments.
The educational opportunities offered at the forum also play a vital role in developing a skilled workforce necessary for the effective functioning of capital markets, according to the economist.