Authorisation Evidence for a Capital Market Institution — Not a Generic Project Feasibility File
Authorisation Evidence for a Capital Market Institution — Not a Generic Project Feasibility File
The CMA licensing case is a regulatory demonstration of an applicant’s proposed securities business and its ability to run that business within the regulatory framework. Article 6 requires the applicant to demonstrate fitness and propriety, appropriate expertise and resources, sufficient management, financial, risk, technology and operational arrangements, and capable people for the proposed activity. It should therefore be assembled as an authorisation evidence file rather than presented as a conventional project-finance feasibility report. Official source: Capital Market Institutions Regulations, Art. 6(e)
This guide has a deliberately narrow perimeter. It covers CMA authorisation to conduct securities business, whose activities are dealing, arranging, managing, advising and custody. The Securities Business Regulations prohibit conducting securities business in the Kingdom unless the person is a CMA-authorised capital market institution or an exempt person. Official source: Securities Business Regulations, Arts. 2 and 5 It does not reproduce Googan Guide 9’s SAMA route or import SAMA licensing evidence into a CMA application. SAMA’s Rulebook separately defines a financial institution as an entity it supervises and regulates. Official SAMA source: Definitions
Annex 3.1 gives the feasibility-related core of the authorisation file. The proposed business profile sets out the securities and services sought for each activity. The business plan then covers the initial 12 months or more following authorisation, including intended products and services, security classes and types, trading venues, client characteristics, and relevant exchange, clearing-centre or depository memberships. Official source: Capital Market Institutions Regulations, Annex 3.1, First: paras. 4–5
The financial case is equally specific. The applicant provides auditor-accredited financial statements, prepared under Saudi Organization for Chartered and Professional Accountants standards and in the CMA-prescribed format. They must show present and projected capital, financial resources, income and expenses, explain the supporting capitalisation and assumptions, and be accompanied by projected financial statements for 12 months after the proposed commencement date. Official source: Capital Market Institutions Regulations, Annex 3.1, First: para. 6
The distinction matters. The reviewed official material establishes a business plan and financial evidence; it does not establish a separately titled feasibility-study deliverable, a compulsory market-sizing methodology, an environmental study, or a generic CMA feasibility template for this authorisation route. No sufficient official Saudi source was identified to establish this requirement. Additional analysis may be useful internally, but should not be labelled a CMA requirement without current official support.
CMA may seek more information, make enquiries, call the applicant or representative to explain a matter, and verify submitted information. Once it notifies the applicant in writing that all required information and documents have been received, it must decide within a maximum of 30 days; the decision can be approval, conditional/limited approval, or refusal with reasons. Official source: Capital Market Institutions Regulations, Art. 7(a)–(d)
Common Documents for a CMA Capital Market Institution Authorisation File
Practical Preparation Sequence Based on Official CMA Requirements
Define the securities activity
Anchor the proposed operating model to dealing, arranging, managing, advising and/or custody before drafting the file. Official source: Securities Business Regulations, Art. 2
Test the licence architecture
Establish the relevant legal-form route, confirm that management and head office will be in the Kingdom, and assess the applicable paid-up-capital condition. Dealing and custody require SR50 million; managing investments and operating funds requires SR20 million; other activity wording is tied to expected annual expenses as set out in Article 6. Official source: Capital Market Institutions Regulations, Art. 6(f)–(h)
Produce the proposed business profile
Record proposed securities and services by activity, then test whether that scope agrees with the business plan and forecast case. Official source: Annex 3.1, First: para. 4
Write the authorisation business plan
Address the first 12 months or more after authorisation, product and service set, instruments, venues, target clients and relevant memberships. Official source: Annex 3.1, First: para. 5
Substantiate the financial case
Assemble current and projected financial statements, funding and resource support, stated assumptions and the required 12-month post-commencement forecast. Official source: Annex 3.1, First: para. 6
Assemble ownership, governance and people evidence
Coordinate controller and close-link information, the governing-body resolution, ownership chart, organisation chart, and the proposed registered-person applications. Official source: Annex 3.1, First: paras. 1–3, 7, 10–11
Complete the CMA system submission inputs
Use the Authorisation System; complete the application and attach required documents, trade-name reservation evidence, application-study payment evidence and registration applications for registrable functions. Official source: Authorisation System
Maintain an evidence response pack
CMA may make enquiries, request further information within 30 days of its request, invite the applicant or representative to answer questions, and verify the supplied information. Official source: Capital Market Institutions Regulations, Art. 7(a)–(b)
Separate authorisation from launch readiness
Do not start securities business merely because the authorisation decision has been received. Meet the annex’s commencement-of-business conditions, including systems and controls, continuity planning, technical availability, facilities, registered persons and an Arabic website at a minimum. Official source: Art. 7(d) and (f); Annex 3.1, Second
Source-Grounded Matrix for the CMA Business-Plan Evidence File
| Document type | Common use | Note |
|---|---|---|
| Regulatory gateway | Securities business in the Kingdom requires a CMA-authorised capital market institution unless an exemption applies. | Confirm the CMA perimeter before preparing any supporting case. Official source: Securities Business Regulations, Art. 5 |
| Activity selection | The regulated activities are dealing, arranging, managing, advising and custody. | Align the requested permission with the actual service model. Official source: Securities Business Regulations, Art. 2 |
| Business profile | A proposed profile identifies the securities and services for each requested activity. | Use it as the consistent scope control for the plan and forecasts, not as a generic marketing document. Official source: Annex 3.1, First: para. 4 |
| Business plan | The plan covers at least 12 months and specified products, instruments, venues, client nature and memberships. | Translate the operating proposition into reviewable licensing evidence. Official source: Annex 3.1, First: para. 5 |
| Financial evidence | Current and projected financial position, capital, resources, income, expenses, support, assumptions and a 12-month post-start forecast are specified. | Demonstrate the financial case without calling non-specified investment metrics mandatory. Official source: Annex 3.1, First: para. 6 |
| Capital and legal architecture | Article 6 specifies legal-form, paid-up-capital and Saudi head-office conditions by activity. | Keep legal minimum capital separate from forecast assumptions and operating evidence. Official source: Capital Market Institutions Regulations, Art. 6(f)–(h) |
| People and governance | The annex requires controller/close-link material, an organisation chart and proposed registered-person applications. | Make ownership, accountability and registrable functions legible to the reviewer. Official source: Annex 3.1, First: paras. 1–2, 7, 10–11 |
| Review and decision | CMA may enquire, seek additional information and verify; following written notice of complete receipt, it decides in a maximum of 30 days. | Retain a traceable response pack; do not represent the 30 days as a preparation estimate. Official source: Capital Market Institutions Regulations, Art. 7 |
| Commencement | Post-authorisation commencement conditions must be met before business starts. | Treat operational controls and launch readiness as a distinct workstream. Official source: Art. 7(d), (f); Annex 3.1, Second |
15 Verified Questions on CMA Business-Plan Evidence and Authorisation
Does CMA require a standalone feasibility study for this licence?
This guide does not treat a feasibility study as a separately established deliverable. Annex 3.1 names a business plan and current/projected financial statements, rather than a document titled “feasibility study.” No sufficient official Saudi source was identified to establish this requirement. Official source: Capital Market Institutions Regulations, Annex 3.1, First: paras. 5–6
Is this the same route as a SAMA licence?
No. The subject here is CMA authorisation to conduct securities business. SAMA’s Rulebook uses “financial institution” for an entity supervised and regulated by SAMA, so a SAMA licensing route should not be substituted for this CMA file. Official source: Securities Business Regulations, Art. 5 Official SAMA source: Definitions
Which activities make up securities business for this purpose?
The Securities Business Regulations list dealing, arranging, managing, advising and custody. The requested activity profile should match the service actually proposed. Official source: Securities Business Regulations, Art. 2
Can an application be filed before the applicant is incorporated?
Yes. Article 6 permits founders or controlling shareholders to submit the authorisation application when the applicant has not yet been established. Those founders or controlling shareholders become subject to the applicable applicant provisions upon submission. Official source: Capital Market Institutions Regulations, Art. 6(b)
What must the business plan address at a minimum?
It must give a detailed description of the proposed securities business for at least the first 12 months after authorisation, including intended products and services, security classes and types, intended exchanges and markets, proposed clients, and relevant current or intended memberships. Official source: Capital Market Institutions Regulations, Annex 3.1, First: para. 5
Does the 12-month plan run from application submission?
No. The business-plan period is at least the first 12 months after authorisation. The financial forecast requirement is framed as the expected position 12 months after the proposed commencement date. Official source: Capital Market Institutions Regulations, Annex 3.1, First: paras. 5–6
Are financial forecasts part of the authorisation evidence?
Yes. The annex specifies current and projected financial position, including capital, resources, revenues and expenses, supporting evidence and assumptions, plus projected financial statements for 12 months after proposed commencement. Official source: Capital Market Institutions Regulations, Annex 3.1, First: para. 6
What paid-up capital minimum is stated in the regulation?
Article 6 states SR50 million for dealing and custody and SR20 million for managing investments and operating funds. For managing investments, arranging and advising, Article 6 instead uses capital wording linked to expected expenses for one year; apply the provision to the activity sought rather than using one figure across all applications. Official source: Capital Market Institutions Regulations, Art. 6(g)
Are registered-person submissions part of the authorisation package?
Yes. Annex 3.1 requires a list of proposed registered persons and a registration application for each, including qualifications and experience. The CMA service page also identifies a registration application for registrable functions. Official source: Capital Market Institutions Regulations, Annex 3.1, First: para. 7 Official source: Authorisation System
Must the institution be managed and headquartered in Saudi Arabia?
Yes. Article 6 requires a capital market institution’s management and head office to be in the Kingdom. It also sets particular legal-form conditions for dealing, custody and managing, while providing a broader Saudi-established legal-form option for arranging or advising. Official source: Capital Market Institutions Regulations, Art. 6(f), (h)
Where is the application made, and what service-page evidence is identified?
The application is made through CMA’s Authorisation System. CMA’s current service page identifies completing the application and supporting documents, proof of trade-name reservation, proof of payment of application-study fees, and the registration form for registrable functions. Official source: Authorisation System
Can CMA ask for further information?
Yes. CMA may make enquiries, call the applicant or representative to answer questions or explain matters, request additional information within 30 days of the request, and verify supplied information. It may refuse to consider an application where requested information is not provided or not provided within the requested time. Official source: Capital Market Institutions Regulations, Art. 7(a)–(b)
What published decision period applies?
After CMA receives all required information and documents, it notifies the applicant in writing and makes a decision within a maximum of 30 days from that notice. The possible outcomes are approval in whole or part, approval subject to conditions or limitations, or refusal with reasons. Official source: Capital Market Institutions Regulations, Art. 7(c)
May the applicant conduct or represent itself as conducting securities business before the decision?
No. An applicant must not carry on, or hold itself out as carrying on, securities business before receiving CMA’s authorisation decision. Official source: Capital Market Institutions Regulations, Art. 7(f)
Does an authorisation decision alone permit immediate launch?
No. Before commencing business, the institution must satisfy Annex 3.1 commencement requirements. These include control documentation, business continuity, suitable technical systems and facilities, registered-person requirements and an Arabic-language website at a minimum. Official source: Capital Market Institutions Regulations, Art. 7(d); Annex 3.1, Second
This guide is for general information and is not legal or consular advice. Always verify current requirements with the receiving authority.