Once a family has agreed what it wants a listing to achieve, the next decision is where to list. For a Saudi family business considering an initial public offering (“IPO”), selecting the appropriate listing venue is a strategic decision, not simply a matter of satisfying admission requirements.
The Saudi Exchange operates two equity markets: the main market (the “Main Market”) and the parallel market (“Nomu”). Both provide access to the Saudi capital markets, but they differ in their admission criteria, investor eligibility, disclosure requirements, and continuing obligations.
The choice should reflect the company’s size, financial performance, governance maturity, and long-term objectives.
I. The Main Market
The Main Market is the principal equity market operated by the Saudi Exchange. It is generally suited to established businesses seeking access to a broader investor base, greater market visibility, and the liquidity associated with the principal market.
The admission requirements reflect the expectations placed on companies accessing this wider investor base. Among other requirements, the issuer must have an expected market value of at least SAR 300 million for the shares to be listed, an operating track record of at least three years in the same main activity, supported by three years of audited financial statements, at least 200 public shareholders, and a public float of at least 30%.
A Main Market issuer is also expected to demonstrate that its financial reporting, internal controls, and governance arrangements are sufficiently developed to support the obligations of a listed company.
II. Parallel Market (Nomu)
Nomu provides an alternative route for companies seeking access to the capital markets without first satisfying all the Main Market admission requirements.
It is particularly relevant to growing businesses that may not yet have the scale or operating history required for the Main Market. Investment in Nomu is restricted to Qualified Investors, and its admission and continuing-obligations framework is comparatively more flexible.
The principal admission requirements include an expected market value of at least SAR 50 million for the shares to be listed, at least one financial year of operating history, and at least 50 public shareholders.
The public-float requirement may be satisfied through either a minimum 20% public float or a public float valued at SAR 50 million, subject to at least 10% public ownership of the relevant class of shares.
For a family, the public-float requirement also sets a ceiling on control. On the Main Market, a 30% float means the family can retain no more than 70% of the shares at listing. On Nomu, it can retain up to 80%, or more where the alternative SAR 50 million test is met. How much ownership the family wishes to keep should therefore inform the choice of market as much as the admission thresholds do.
Nomu also provides greater flexibility in certain financial reporting requirements. For example, issuers disclose semi-annual financial statements within 45 days of the end of the relevant period, compared with quarterly reporting within 30 days for Main Market issuers.
This flexibility does not remove the need for proper financial controls, due diligence, or meaningful disclosure. Nomu issuers remain subject to the applicable regulatory framework and their continuing obligations.
III. Can a company move from Nomu to the Main Market?
One of Nomu’s distinguishing features is the ability for an issuer to apply for a subsequent transfer to the Main Market.
To qualify, the company must have completed at least two calendar years of listing on Nomu and meet the transfer conditions in the Listing Rules. These include an average aggregate market value of at least SAR 200 million over the preceding 12 months, and latest financial statements showing no accumulated losses and meeting the prescribed auditor-opinion requirements.
The issuer must also satisfy the Main Market public-float and shareholder-distribution liquidity criteria. These include specific tests relating to the concentration of public shareholdings and the proportion of shares held by public shareholders.
The transfer is subject to the applicable Saudi Exchange procedures and approvals.
IV. Lock-ups, governance, and the family-business transition
The distinction between the two markets extends beyond admission thresholds.
Substantial shareholders (those holding 5% or more) named in the prospectus may not dispose of their shares for six months after trading begins on the Main Market, or 12 months on Nomu, unless the prospectus sets a longer period.
For a family whose priority is diversifying its wealth, or whose succession arrangements allow some members to exit, this timing should be built into the plan from the outset.
Separately, the Corporate Governance Regulations establish the governance framework applicable to listed joint stock companies. For Main Market issuers, the regulations are generally mandatory, subject to provisions expressly designated as guiding or optional. For Nomu issuers, specified provisions are mandatory, while the remaining provisions are generally guiding, unless otherwise required by the applicable regulatory framework.
V. What this means in practice
In broad terms, the Main Market suits a family that intends to realise value in the near term, or that is prepared to commit the company to a full institutional governance regime from listing. Nomu suits a family that wants a market valuation and the discipline of a listed company while retaining a larger share of ownership and control, with a view to transferring to the Main Market over time.
The family’s primary objective should also guide the choice. Where the priority is diversifying family wealth, the Main Market’s broader investor base and shorter lock-up offer earlier and deeper access to value. Where it is separating the family from the management of the business, Nomu can serve as a first step, allowing the company to build its governance and reporting track record before transferring to the Main Market. Where it is continuity across generations, the lock-up period and the depth of the market will shape when and how family members can exit.
Neither market should be selected solely because its entry requirements appear less demanding. The decision should reflect the company’s current position, its intended growth trajectory, and its ability to meet the obligations that follow listing.
The right listing venue is the one that supports the company’s long-term objectives while allowing it to comply sustainably with the applicable regulatory framework.
Having selected the market, the next challenge is preparing the business for admission and addressing the legal and regulatory requirements of the IPO process.
This article is for general information only and does not constitute legal advice. It reflects Saudi laws and regulations as at November 2026. Specific advice should be sought before acting on any matter discussed.