Parallel Market Nomu

Nomu - Parallel Market

A parallel equity market with lighter listing requirements that serves as an alternative platform for companies to go public, and the investment in this market is restricted to Qualified Investors.

The main objectives of establishing Nomu - Parallel Market:

  1. Additional source of funding for issuers to access capital.
  2. Increased diversification and deepening the capital market.

Main characteristics:

  1. New market with lighter requirements.
  2. Restricted to Qualified Investors.
  3. Possibility of transition to Main Market after new filing process with the Capital Market Authority (CMA).

Criteria for issuers:

Nomu - Parallel Market Criteria
Admission Document Modified, less stringent application
Offering Process Simpler offering process, similar to a private placement
Transition to Main Market The company must:
  1. Be listed on Nomu - Parallel Market for at least 2 years
  2. Meet the Main Market requirements
Financial Disclosure Disclosure of quarterly financial statements within 45 calendar days from the end of the period and year-end financial statements within 90 calendar days from the end of the period
Material Changes Disclosure Similar to the Main Market

Admission requirements:

Offering to Qualified Investors takes place first, then listing is conducted. The Offering & Listing process takes the following criteria into consideration:

  • The issuer must be a Saudi joint stock company or a joint stock company which the majority of its capital is owned by citizens of a member state of the Cooperation Council for the Arab States of the Gulf and enjoys a nationality of one of them
  • Minimum market cap of SAR 10 million.
  • At least 20% of shares owned by the qualified public, with no single investor owning more than 5% .
  • Min 1 year of operational and financial performance.
  • Financial advisor mandatory, legal advisor optional.
  • Annual audited financial statements.
  • Quarterly reviewed financial statements.
  • Disclosure of material information.
  • No profitability track record required.
  • Lock Up Period: 100% of pre-offering investor shares for one year.
  • If the expected aggregate market value for all shares to be listed exceeds SAR 40 million, at least 50 public shareholders are required. If the expected aggregate market value for all shares to be listed is less than SAR 40 million, at least 35 public shareholders are required.

The key differences between Main Market and Nomu - Parallel Market:

  Main Market Nomu - Parallel Market
Minimum Market Cap SAR 100 million SAR 10 million
% Offered At least 30% At least 20%
Public Shareholders At least 200

If the expected aggregate market value for all shares to be listed exceeds SAR 40 million, at least 50 public shareholders are required.

If the expected aggregate market value for all shares to be listed is less than SAR 40 million, at least 35 public shareholders are required.

Continuous Obligations Standard disclosure requirements. Disclosure of quarterly financial statements within 30 calendar days from the end of the period and year-end financial statements within 90 calendar days from the end of the period

Lighter financial disclosure requirements (with regards to time permissible to disclose)

Disclosure of quarterly financial statements within 45 calendar days from the end of the period and year-end financial statements within 90 calendar days from the end of the period

Daily Fluctuation Limits ±10% ±20%

Who can invest in 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 per the below criteria:

  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 the Securities Depository Center.
  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. Qualified Foreign Investors.
  8. Any other legal persons allowed to open an investment account in the Kingdom and an account at the Depositary Center.
  9. Natural persons allowed to open an investment account in the Kingdom and an account at the Depositary Center, and fulfill any of the following criteria:
    1. 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.
    2. the average size of his securities portfolio shall exceed 10 million Saudi riyals during the last twelve months.
    3. holds the General Securities Qualification Certificate which is recognized by the Authority.
  10. Any other persons prescribed by the Authority.

Nomu - Parallel Market FAQs

  1. What is Nomu – Parallel Market?

    Nomu is a parallel equity market with lighter listing requirements that serves as an alternative platform for companies to go public. The investment in this market is restricted to Qualified Investors.

  2. Why is Tadawul creating Nomu – Parallel Market?

    Launching Nomu - Parallel Market is a step towards fulfilling Tadawul’s plans to further develop the capital market. It is also in alignment with the objectives of the 2030 Vision which stress the importance of developing a more advanced capital market open to the world, allowing greater funding opportunities and stimulating economic growth. This will in turn generate more diverse investment opportunities and instruments for all capital market participants.

  3. Is Nomu- Parallel Market dedicated for SMEs?

    Nomu - Parallel Market will open new investment opportunities to all types of companies – including SMEs – which play a key role in leveraging the national economy and accelerating development.

  4. What are Nomu- Parallel Market's main characteristics?
    • New market with lighter requirements
    • Restricted to Qualified Investors
    • Possibility of Transition to Main Market after new filing process with the Capital Market Authority (CMA)
  5. What are the differences between the Main Market and Nomu – Parallel Market?
      Main Market Nomu – Parallel Market
    Minimum Market Cap SAR 100 million SAR 10 million
    % Offered At least 30% At least 20% (with no single investor owning more than 5%)
    Public Shareholders At least 200

    If the expected aggregate market value for all shares to be listed exceeds SAR 40 million, at least 50 public shareholders are required.

    If the expected aggregate market value for all shares to be listed is less than SAR 40 million, at least 35 public shareholders are required.

    Continuous Obligations Standard disclosure requirements. Disclosure of quarterly financial statements within 30 calendar days from the end of the period and year-end financial statements within 90 calendar days from the end of the period    

    Lighter financial disclosure requirements (with regards to time permissible to disclose)


    Disclosure of quarterly financial statements within 45 calendar days from the end of the period and year-end financial statements within 90 calendar days from the end of the period

    Daily Fluctuation Limits ±10% ±20%
  6. What are the listing requirements for Nomu- Parallel Market?

    Offering to Qualified Investors takes place first, then listing is conducted. The Offering and Listing process takes the following criteria into consideration:

    • The issuer must be a Saudi joint stock company or a joint stock company which the majority of its capital is owned by citizens of a member state of the Cooperation Council for the Arab States of the Gulf and enjoys a nationality of one of them
    • Minimum market cap of SAR 10 million
    • 20% of shares owned by the qualified public; with no single investor owning more than 5%
    • Minimum 1 year of operational and financial performance
    • Financial advisor mandatory, legal advisor optional
    • Annual audited financial statements
    • Quarterly reviewed financial statements
    • Disclosure of material information
    • No profitability track record required
    • Lock up Period: 100% of pre-offering investor shares for one year
    • If the expected aggregate market value for all shares to be listed exceeds SAR 40 million, at least 50 public shareholders are required. If the expected aggregate market value for all shares to be listed is less than SAR 40 million, at least 35 public shareholders are required
  7. Who can invest in 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 per the below criteria:

  8. Authorized Persons act for their own account
  9. 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
  10. 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 the Securities Depository Center
  11. Government-owned companies either directly or through a portfolio managed by a person authorized to carry out managing activities
  12. Companies and funds established in a member state of the Cooperation Council for the Arab States of the Gulf
  13. Investment Funds
  14. Qualified Foreign Investors
  15. Any other legal persons allowed to open an investment account in the Kingdom and an account at the Depositary Center
  16. Natural persons allowed to open an investment account in the Kingdom and an account at the Depositary Center, and fulfill any of the following criteria:

    a. 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

    b. the average size of his securities portfolio shall exceed 10 million Saudi riyals during the last twelve months

    c. holds the General Securities Qualification Certificate (CME-1) which is recognized by the Authority

  17. Any other persons prescribed by the Authority

 

(The source Tadawul website)




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