Saudi domestic retail sukuk: practical considerations for issuers and financial advisors

Saudi Arabia's domestic retail sukuk market is gaining depth and momentum as issuers seek to diversify funding sources and broaden investor reach within the Kingdom. Against the backdrop of Vision 2030 and the continued growth and deepening of the domestic capital markets, domestic retail sukuk is increasingly being considered as a potential strategic funding channel alongside more established domestic and international private placement routes.

This evolution has been underpinned by continued enhancements to the Saudi regulatory and market infrastructure for debt instruments, including changes aimed at facilitating listings and strengthening local market participation.

Recent transactions illustrate the market's growing maturity. A number of Saudi issuers, including Rawasi Al Bina, Aqaseem and Saudi German Health Group, have accessed the domestic retail sukuk route. Most recently, in late 2025, Cenomi Centers established a CMA-approved domestic retail sukuk programme of up to SAR 4.5 billion and completed an inaugural SAR 2.05 billion issuance that was admitted to trading on Tadawul (the Saudi Exchange).

This client alert provides a practical, high-level guide to the Saudi domestic retail sukuk route, covering why market participants may consider domestic retail issuances (as an alternative to the private placement markets), the core legal and regulatory framework, and the key execution, operational and pricing considerations that most often shape timetable, disclosure and transaction viability.

Key takeaways:

• Domestic retail sukuk is now an increasingly viable funding option. For many Saudi issuers, domestic retail sukuk issuances can sit alongside, and in some cases provide an alternative to, international U.S.$-denominated private placement issuances.
• The regulatory framework is clear and rules-based. A domestic retail sukuk is structured around three core regulatory elements: (i) CMA rules on offering of securities and continuing obligations; (ii) Tadawul listing requirements; and (iii) corporate authority and approvals under the Saudi Companies Law.
• Dual-track approvals are a central execution feature. A Saudi retail offering typically runs on two parallel tracks: (i) the CMA prospectus approval and regulatory review process under the CMA rules on offering of securities and continuing obligations; and (ii) the Tadawul listing and admission process (which includes conditional approval, final approval and commencement of trading).
• Dual-language documentation and translation management. While the CMA-approved offering prospectus is prepared and reviewed by the CMA in Arabic, at the drafting stage the prospectus and other key offering materials are typically drafted in both English and Arabic. This creates a dedicated dual-language workstream that must be carefully managed to avoid adverse timing impact, increase in cost and unintended divergence between the English-language and Arabic-language documents.
• Domestic structures can be more flexible on sukuk asset composition. The intended target market for Saudi public retail offerings are domestic investors, as opposed to international investors, and therefore the transactions tend to adopt Shariah structures that are typical for domestic issuances – which may be preferred from an asset perspective.
• Retail distribution requires tight execution discipline and operational readiness. Retail offerings heighten sensitivity around the offer perimeter and public communications, requiring the prospectus, subscription flow and all investor-facing materials to be tightly aligned and controlled. Subscription channels, allocation methodology, settlement arrangements and investor communications must also be structured for retail-scale execution, even where the issuance is intended to be placed across a mix of retail and institutional investors.

The case for Saudi domestic retail sukuk

A Saudi domestic retail sukuk can offer issuers a compelling way to diversify funding sources and broaden their investor base within the Kingdom. It provides access to a broad domestic market with its investment demand, including retail participation alongside local institutional investors, and can be particularly attractive when SAR-denominated funding or a Saudi cashflow profile is a key factor underpinning the credit story of the issuer. 

As with international U.S.$-denominated issuances, domestic retail sukuk can support repeatable funding strategies through programme structures. Tadawul listing, which is required for domestic retail offerings, also provides market visibility and secondary market tradability.

The domestic route can also offer the ability to use Shariah structures commonly accepted by Saudi domestic investors, including Mudaraba and Mudaraba-Murabaha structures, which may provide greater flexibility for issuers whose business models or asset portfolios are better suited to profit-sharing arrangements rather than structures requiring tangible asset pools.

Operational and pricing considerations

The trade-off for issuers and financial advisors is that the Saudi domestic public route is without doubt operationally intensive and heavily process-driven, and is likely to be most suitable for issuers of sufficient scale and market profile to justify the additional regulatory and execution demands. Arabic-language drafting and verification, the sequencing of CMA review and Tadawul admission, and internal corporate approvals will lead to longer deal execution timeframes than for a less regulated and less process-driven private placement option. Retail distribution also introduces additional mechanics around subscriptions, allocation and settlement readiness, including coordination with receiving agents and local banks.

As usual, there may be a degree of tension between the expectations of the issuer and the market demand in terms of pricing. With fewer transactions in the market, there may be uncertainty surrounding the yield curve, affecting the understanding and expectations of pricing, tenor and yield. These dynamics will develop as the domestic retail sukuk market grows, but in the meantime the minimum pricing required to attract sufficient demand from retail investors will need to be assessed on a case-by-case basis and measured against a variety of transactions, including other retail offerings as well as certain private placements from issuers with similar credit profiles.

Given the above challenges, in some cases (particularly for smaller issuers or those seeking faster execution), the private placement route may remain the more appropriate option.  For that reason, the domestic option is most effective when evaluated early, alongside private placement alternatives, so that structuring, operational planning and pricing strategy can be assessed from the outset.

The regulatory framework: the three pillars

A Saudi domestic retail sukuk is delivered through three regulatory workstreams that must be managed in parallel: (i) the CMA's public offering regime; (ii) the Tadawul's listing requirements for debt instruments; and (iii) the issuer's corporate power, authorisations and approvals required under the Saudi Companies Law. In practice, smooth execution often comes down to sequencing these workstreams early and keeping them closely aligned throughout the transaction timeline.

1. CMA rules: offer process and continuing obligations

The CMA rules on offering of securities and continuing obligations set the baseline for how securities are to be offered to the public in Saudi Arabia, the related disclosure requirements as well as compliance obligations that will apply to the issuer after the completion of issuance. For any issuance of domestic retail sukuk, the offering document (base prospectus) is key, with content requirements set out in the rules. The CMA will closely scrutinise this document during its regulatory review.

2. Tadawul listing rules: admission and ongoing market discipline

In parallel, the Tadawul listing rules for debt instruments govern admission of sukuk to listing on the Saudi Exchange, and the issuer's ongoing interaction with the market through announcements and disclosures. As with the CMA process, the Tadawul listing workstream must be planned from the outset. All relevant workstreams surrounding the CMA approval as well as the listing should be aligned to ensure regulatory approval and listing admission occur seamlessly and concurrently.

3. Saudi Companies Law: corporate capacity and approvals

Issuers need to ensure that the transaction is properly authorised in accordance with their constitutional documents and the Saudi Companies Law, including the required board and, where applicable, shareholder approvals.

Looking Ahead

It may well be that in the coming months and years Saudi domestic retail sukuk will be increasingly considered a credible and scalable funding option for issuers seeking to deepen their domestic investor base and diversify funding sources within the Kingdom. As the regulatory and market infrastructure for listed debt instruments continues to develop, we expect market familiarity with the public retail route, including its approvals pathway, clarity on disclosure expectations and the retail execution mechanics, to continue to strengthen.

For Saudi issuers, financial advisors and intermediaries the key takeaway is to consider domestic retail sukuk early, alongside international and domestic alternatives, to ensure that Shariah structuring, pricing strategy and operational planning can be assessed from the outset. With the right sequencing and execution discipline, domestic retail sukuk can provide an effective route to unlocking Shariah-compliant funding tailored to Saudi domestic market dynamics and investor demand.

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_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

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