CMA to release rules for foreign financial institutions investment

08/04/2015 07:53 AST

The Saudi Capital Market Authority (CMA) will issue the Rules for Qualified Foreign Financial Institutions Investment in Listed Shares and update the Investment Funds Regulations, its chairman Mohammed Abdullah Aljadaan, said in announcing the CMA’s Annual Report for the fiscal year 2014.

He said the teams working on these two projects are reviewing and studying all the comments and observations received from the public and interested parties and are updating the regulations for approval.

He further said that 2014 witnessed a 1185.9 percent increase from 2013 the public offering of shares as its operations exceeded SR25.2 billion. Total amounts raised from securities offerings reached SR69.1 billion, up 15.3 percent from 2013.

As part of its continuous efforts to protect investors, CMA has started applying its board’s resolution to adopt the Instructions and Procedures Related to Listed Companies with Accumulated Losses Reaching 50 percent or More of its Capital. By the end of 2014, the number of companies with accumulated losses reached 12 companies, of which 4 companies had accumulated losses of 75 percent or more of its capital.

Aljadaan noted that one of the most important achievements last year was developing and approving CMA’s strategic plan for the five-year period (2015-2019). The plan includes 13 goals which are broken down into four main strategic themes: foster capital market development, promote investor protection, improve the regulatory environment and enhance CMA’s organizational excellence.

He said that during the preparation of the strategic plan, the most important challenges to the capital market, its needs, other influential factors, as well as the views and comments of specialists at the CMA and those of market participants such as listed companies, authorized persons (APs) and investors have been studied and taken into consideration.

Moreover, Aljadaan said CMA continued its efforts to develop and regulate the capital market by approving the Credit Rating Agencies Regulations which would be implemented from September 1, 2015.

In terms of strengthening disclosure and protecting investors, CMA’s board issued its resolution to suspend trading the shares of a listed company if the certified public accountant’s report on its preliminary or annual financial statements included a Disclaimer of Opinion or an Adverse Opinion and it will be lifted after removing the Disclaimer of Opinion or an Adverse Opinion from the financial reports.

He noted that CMA last year continued to monitor websites and social media networks using the latest monitoring tools to detect violations of the Capital Market Law and its implementing regulations. CMA recorded an increase in alerts on irregularities in the electronic media, which increased by 23 percent from the year 2013. This caused CMA to increase its efforts to intensively search these mediums, and such efforts rose by 66.6 percent from 2013. CMA also continued its cause and cycle inspection visits on Authorized Persons (APs). The number of licenses covered by inspections in 2014 were 161 licenses pertaining to 56 APs.

As part of its endeavors to overcome difficulties that may face complainants, CMA has provided a set of channels for receiving complaints. The complaints handled by CMA are classified based on their nature and process. CMA resolved 485 complaints in 2014, up 39 percent from 2013. It also prepared notifications/notices for 112 complaints it received to enable complainants to file their complaints to the Appeal Committee for the Resolution of Securities Disputes (ACRSD).

Saudi Gazette