Beware of unlicensed stock brokers, CMA tells investors

02/12/2015 07:36 AST

The Capital Market Authority (CMA) has cautioned investors against dealing with unlicensed institutions or individuals involved in the sale and purchase of stocks.

In a statement issued on Tuesday, CMA said that anyone who engages in stock trading without its license or approval will be liable to regulatory sanctions.

It asked investors to alert CMA in case they come across unlicensed individuals or institutions conducting brokerage or making recommendations on the shares of listed companies in the market through websites, social media, newspapers, television channels or any other means.

It said investors must verify the authenticity of stock brokers through CMA website www.cma.org.sa which lists each licensed institution.

The Authority noted that unlicensed individuals or institutions are not entitled to purchase or sell stocks, to be involved in stock management, or to provide consultancy. The Capital Market Authority received last year 11 complaints relating to stock trading by unlicensed institutions or individuals.

Last month the regulator in a statement reiterated rules and regulations on insider trading, calling the act a “criminal offense”.

“Any person who obtains, through family, business or contractual relationship, inside information is prohibited from directly or indirectly trading in the security related to such information, or to disclose such information to another person with the expectation that such person will trade in such security,” the Capital Market Authority said in a statement.

Saudi Gazette