The Saudi Capital Market Authority (CMA) has announced that regulations for Security Token offerings (STO) will be out by the end of 2022 in Saudi Arabia, the organisation’s deputy for Strategy & International Affairs, Yazeed Saleh Aldemaigi, said in an interview with local media.
The interview took place on the side lines of the closing ceremony of the second cohort for the Fintech Accelerator Program where 12 FinTech companies presented their innovative solutions. The event was held under the patronage of the Governor of the Saudi Central Bank (SAMA), Dr Fahad AlMubarak and the Chairman of the Capital Market Authority (CMA), Mohammed Alkuwaiz.
AlDemaigi noted to CNBC Arabia,” The applications for STO offerings will be available on the CMA digital platform by end of 2022. The Fintech Lab at CMA has been working on finding the most appropriate environments for FinTech start-ups.”
The STO regulations that will come out at the end of 2022 will help to attract foreign investment firms interested in the FinTech domain in KSA as well as support local companies. The Fintech Lab from CMA was launched in 2017 with the aim to provide a regulatory framework that is conducive for the innovation of Financial Technology (FinTech) in the capital market within the Kingdom.
One of the business models under the Fintech Lab pertains to the use of Distributed Ledger Technology (DLT) to arrange the Offering of Securities and Custody Services. It is a platform that uses Distributed Ledger Technology (DLT) to arrange the offering of securities (Sukuk as a preliminary stage) to investors, in coordination with the Issuer and the Authorized Person (AP) assigned by the Issuer as an Offering Advisor.
During the event, Dr Fahad AlMubarak , SAMA’s governor, said, “Start-up Fintech companies’ role extends beyond providing innovative financial services to include supporting the broader scope of economy. In cooperation with the CMA and our partners in the government and private sectors, SAMA seeks to develop the Fintech sector under the ambitious national strategy recently announced by His Royal Highness, Crown Prince and Chairman of the Supreme Committee for Research, Development and Innovation; and under the Financial Sector Development Program (FSDP)–one of the Saudi Vision 2030 programmes. Such efforts are made to fulfil the Leadership’s aspirations for the Kingdom to become a world-class financial hub.”
“This year, the Saudi FinTech industry has witnessed the largest number of venture capital investment deals. By building regulatory frameworks that attract innovative business models and using emerging technologies that have the potential to advance the provision of financial products and services, we can take the financial services industry to new heights, stimulate investment, promote economic development and empower entrepreneurs,” said Alkuwaiz
