CMA Proposes 50% Margin Rule for Foreign Trades

The Saudi Capital Market Authority has proposed a new rule requiring clients to provide a margin of at least 50% of the transaction value when engaging in margin trades involving securities listed in markets outside Saudi Arabia. The draft applies to authorized capital-market institutions carrying out dealing activities abroad.

Under the proposal, the required margin would be monitored on a periodic basis to ensure clients maintain the minimum coverage throughout the trade. In practical terms, this means that for a trade worth SAR 100,000, the minimum margin a client would need to provide is SAR 50,000.

The draft also introduces two key restrictions. It would prohibit margin trades involving highly leveraged instruments, and it would bar trades in companies whose accumulated losses exceed 50% of their capital. Both measures are aimed at limiting exposure to higher-risk investments.

Why it matters

For residents and investors in Saudi Arabia who trade in international markets through local institutions, the change would raise the amount of capital needed upfront and reduce the level of borrowed funds allowed in such transactions. The goal is to strengthen investor protection and reduce risk in cross-border trading.

The public consultation period for the draft runs until 27 October 2026. If approved, the rule is scheduled to take effect on 1 November 2026, though it remains subject to final approval and possible amendments before it becomes binding.

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