​As part of CMA's responsibilities to protect citizens and investors in the market from unfair and unsound practices, and further to its efforts to achieve fairness, efficiency and transparency in the market, and based on the Capital Market Law issued by Royal Decree Number (M/30) Dated 2/6/1424 H, the CMA Board has issued its resolution which includes amending the Article 12 of Market Conduct Regulations to be as follows:

" Article 12:  Clients priority and front running trades

a. An authorised person or a registered person must execute client orders for a security before executing any order on the same security for his own account.

b. An authorised person, a registered person and any associated  person are prohibited from dealing in any security for their own benefit, or for the benefit of another client, or for the benefit of an account which they have an interest in, including any account which they have a discretion on, if such dealing is on the basis of prior knowledge that a client order has been or will be entered on the same security.

c. Persons referred to in paragraph (a) of this Article are porhibited from disclosing to any other person any information related to clients orders that have been entered or will be entered, when they know or should have known that it is possible that such other person may trade in the security related to that information.

d. Any person that obtains through an authorised person or a registered person information related to client orders that have been or will be entered is prohibited from dealing in the security related to such information., if such dealing is for the purpose of benefiting from potential material effect of those orders on the price of that security.

e. Any person authorised to deal with the account of a legal person is prohibited from dealing in any particular security for his own benefit, or for the benefit of an account which he has an interest in, if such dealing is for the purpose of benefiting from potential material effect of that legal person's account orders that have been or will be entered on the price of that security.

f. Any person authorised to deal with the account of a legal person is prohibited from disclosing to any other person any information related to that account orders that have been or will be entered, when he knows or should have known that it is possible that such other person may trade in the security related to that information.

g. Any person that obtains from to deal in any particular security on the basis of information obtained from a person authorsied to deal with the account of a legal person related to this account orders that have been or will be entered, if such dealing is for the purpose of benefiting from potential material effect of those orders on the price of that security.

h. For the purposes of this Article:

1. "Associated person" means in relation to an authorised person:
• Any director, partner, employee, or any person that is (directly or indirectly) controlled by that person; or controls (directly or indirectly) that person.
• any company which is its subsidiary or parent or fellow subsidiary of the parent.
• any company whose directors are accustomed to act in accordance with the authorised person’s directions or instructions.
• any company in the capital of which the authorised person is directly or indirectly interested so that it is able:
• to exercise or control the exercise of 30% or more of the votes at the general meeting on all, or substantially all matters; or
• to appoint or remove directors holding a majority of voting rights at board meetings on all, or substantially all matters.
2. "Associated person" means in relation to a registered person:
• that person's spouse or minor children (together "members of his family").
• any company in whose equity shares the registered person or any member or members (taken together) of his family are directly or indirectly interested so that they are able:
• to exercise or control the exercise of 30% or more of the votes at the general meeting on all, or substantially all matters; or
• to appoint or remove directors holding a majority of voting rights at board meetings on all, or substantially all matters.".

These amendments shall become effective upon their publication.

To view the Market Conduct Regulations click here