​As part of the Capital Market Authority's ("CMA") strategic objectives to regulate and develop the capital market, and in line with the Saudi Vision 2030, and based on the Capital Market Law issued by Royal Decree No. (M/30) dated 02/06/1424 H, the CMA Board issued its Resolution to publish the draft amendments to the definition of the term “Related Party”  stipulated in the Glossary of Defined Terms Used in the Regulations and Rules of the Authority for the purposes of the Rules on the Offer of Securities and Continuing Obligation and the definition of the Term “Related Parties” stipulated in the Corporate Governance Regulations ("Draft Amendments"), for public consultation for a period of (60) calendar days ending on 11/11/1441H corresponding to 02/07/2020G.

Given the importance of investors' confidence in the capital market to the growth of the capital market, and in pursuance to the CMA's efforts to improve and develop all aspects that would enhance such confidence and enhance the efficiency of the regulatory environment and the level of governance and transparency in the capital market, the CMA places the responsibility to review and continuously improve the regulatory environment on the top of its priorities, and therefore seeks to adapt the best international standards in the field of corporate governance and promote good practices in their application.

The Draft Amendments aim to develop the definition of the term “Related Party” for the purposes of the Rules on the Offer of Securities and Continuing Obligation and the definition of the term “Related Parties” for the purposes of the Corporate Governance Regulations as the CMA believes in the importance of the corporate governance in the investors' protection and corporate sustainability and growth.

The main elements of the Draft Amendments are:

a) Aligning the scope of the definition of the term “Related Parties” used for the purposes of the Corporate Governance Regulations with the scope of the definition of the term “Related Parties” used for the purposes of the Rules of the Offer of Securities and Continuing Obligation.

b) Aligning the scope of relatives that are considered related party on both the Corporate Governance Regulations and the Rules of the Offer of Securities and Continuing Obligation.

c) Considering the international best practices and the International Financial Reporting Standards (IFRS) in determining the categories of related parties.

The CMA, with full gratitude, would receive the opinions and comments of relevant and interested persons through the prescribed form via the following email (Laws.Regulations@cma.org.sa).

All comments will be taken into full consideration for the purpose of finalizing the Draft Amendments.

The Draft Amendments and the prescribed form for providing comments can be viewed via the following link:

Draft Amendments to the Definition of “Related Party”

prescribed form for providing comments