The Capital Market Authority (CMA) has tightened rules on how long shares in listed firms can trade if the companies have large accumulated losses. Analysts quoted by Reuters say the move, announced on Monday, can affect several firms.

The new rules will compel companies with losses totaling 50 percent of their capital to announce plans to remedy their financial standing. Otherwise, they will incur penalties, including suspension of trading.

The new rules will come into effect in July next year.

The Kingdom is considering opening its bourse to direct investment by foreigners. Market participants hope a series of slow changes to the regulatory framework, bringing it closer to international standards, will facilitate that move. The Tadawul All-Share Index climbed 0.3 percent to 8,408 points on Monday.

CMA chief Mohammed bin Abdulmalik Al-Asheikh, who was appointed in February, proposed the new rules in May along with suggested changes on how to calculate a stock’s closing price, in order to limit excessive speculation in shares.

Seven companies listed on the Tadawul All-Share Index, including some insurance companies, now have accumulated losses of between 50 and 75 percent, said Turki Fadaak, head of research at Al-Bilad Investment Co.