Five Regulatory Concepts to Master for Saudi CME-1B

Table of Contents

• • 1. The Capital Market Law (CML)
• • 2. Securities Business Regulations (SBR)
• • 3. Market Conduct Regulations (MCR)
• • 4. Investment Funds Regulations
• • 5. The Listing Rules
• • Try It: Test Your Understanding
• • How to use this in your preparation

The current Saudi Capital Market Rules and Regulations (General Chapter), or CME-1B, tests the regulatory knowledge used across the Saudi capital market. Some older material calls this area GSCMR, but candidates should follow the current CME-1B structure published by the Financial Academy.

The five concepts below are useful revision areas, but they are not a replacement for the complete syllabus. Review the current CME-1B regulations guide before allocating your study time.

1. The Capital Market Law (CML)

The Capital Market Law is the foundation of Saudi securities regulation and is the single most tested document in the exam. You must understand:

• The objectives and powers of the CMA — how it supervises the market, issues regulations, and takes enforcement action
• The licensing regime — which activities require CMA authorisation and what conditions attach
• The prohibition on market manipulation, insider dealing, and misleading disclosure
• The CMA’s investigative and disciplinary powers

The CML is principles-heavy, so exam questions often test whether you understand why a rule exists rather than simply what it says. Focus on the CMA’s mandate to protect investors, ensure market integrity, and promote transparency.

2. Securities Business Regulations (SBR)

The SBR governs how authorised persons must conduct their business. Key areas include:

• Categories of authorised activity — dealing, managing, advising, custody, and arranging
• Minimum capital requirements for each activity category
• Fit and proper requirements for firms and individuals
• Record-keeping, reporting obligations, and client classification (retail versus professional versus counterparty)

Client classification is particularly important — the protections that apply to a retail client are significantly stronger than those for a professional client, and exam questions frequently test whether candidates can correctly assign classification based on a scenario.

3. Market Conduct Regulations (MCR)

The MCR covers the rules around how securities are issued, traded, and reported. Major exam topics include:

• Insider trading — what constitutes inside information, who is an insider, and the obligations of persons in possession of such information
• Market manipulation — prohibited trading practices including wash trades, ramping, and misleading conduct
• Disclosure obligations — continuous disclosure requirements for listed companies and the timeframes that apply
• Takeover rules — mandatory offer thresholds and the squeeze-out mechanism

MCR questions are often scenario-based — you will be asked whether a specific action constitutes a breach and what the consequences are.

4. Investment Funds Regulations

Saudi Arabia has a significant and growing funds industry, and the Investment Funds Regulations are consistently tested. You need to understand:

• The distinction between public and private funds and the different rules that apply
• Fund manager obligations — governance, investment restrictions, and reporting to investors
• Real Estate Investment Funds (REIFs) and Investment Traded Funds (ETFs) as specific product types
• Approval and registration requirements for public fund offerings

The numbers matter here — fund-related thresholds, investor eligibility criteria, and minimum subscription amounts appear regularly in exam questions.

5. The Listing Rules

The Listing Rules govern how securities are admitted to trading on the Saudi Exchange (Tadawul) and the ongoing obligations of listed companies. Key areas include:

• Eligibility requirements for listing — financial history, ownership structure, and free float
• IPO disclosure requirements and the prospectus content obligations
• Continuing obligations — financial reporting calendars, material event announcements, and related-party transactions
• Suspension and delisting procedures

Candidates frequently confuse the requirements for different listing segments. Make sure you understand the distinction between the Main Market and Nomu (the parallel market) and the different rules that apply to each.

Try It: Test Your Understanding

How to use this in your preparation

The CME-1B syllabus is regulations-dense, which means passive reading rarely works. The most effective candidates use active recall — reading a rule, covering it, and trying to explain it back in their own words.

Suggested approach:

• Read each regulation section once for understanding
• Use flashcards to drill key definitions, thresholds, and obligations
• Practise mixed mock questions that switch between regulations
• For any question you get wrong, trace the answer back to the specific rule — not just “the SBR” but the specific obligation within it

Our Saudi CME-1B course provides rapid-recall flashcards, chapter summaries, and mock exam questions. The course is also available in Arabic for candidates who prefer to study in their first language.

For broader context, see our Saudi CME-1B regulations guide and our guide to the complete CME-1 qualification.