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Issuers on Tadawul could soon be required to maintain an average closing price of at least SAR 1 for 15 consecutive trading days, according to the Saudi Exchange’s draft amendments to market rules (pdf). The changes also include reducing spread constraints and revising tick sizes in the main and parallel markets, excluding debt instruments. The draft amendments are currently up for public consultation.
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New minimum price rule: Issuers who fail to maintain an average closing price of at least SAR 1 for 15 consecutive trading days must disclose the violation and take corrective action by raising the share price to SAR 3 or higher through a stock consolidation within three months. Failure to comply will result in the suspension of trading in the issuer’s shares, as announced on Tadawul’s website. Off-market trading will be permitted for a maximum of five days following the suspension.
Trading + suspension rules: Trading will be suspended for two days following an issuer’s shareholders’ decision on a stock split, resuming automatically after the suspension ends. A new provision allows off-market trading for up to five days after any trading suspension.
Price bands for tick changes have been expanded:
- A price band below SAR 25 will have a tick size of SAR 0.01;
- Price bands of SAR 25-49.98 will have a tick size of SAR 0.02;
- Price bands of SAR 50-99.95 will have a tick size of SAR 0.05;
- Price bands of SAR 100-249.90 will have a tick size of SAR 0.10;
- Price bands of SAR 250-199.80 will have a tick size of SAR 0.20;
- A price band of SAR 500 or above will have a tick size of SAR 0.50.
