​The Capital Market Authority  (CMA)  confirms its commitment to ensure fairness in securities transactions and limit cases of fraud, deceit, cheating, or manipulation that market participants might face which could negatively affect their transactions and the market’s reputation as well.

As part of its efforts to increase the market’s efficiency and protect investors, CMA works towards stopping violating acts and charges violators with penalties as stated in the Capital Market Law. The Market Conduct Regulations, issued by the Board of the CMA, has mentioned the violating and manipulative acts and its practices in the Saudi capital market. The regulation has also specified the concepts of disclosure and insider trading and the Authorised Persons’ conduct.

Article (2) of the (The Market Conduct Regulations) prohibits any person to engage in or participate in any manipulative or deceptive acts or practices in connection with an order or transaction in a security, if the person knows or has reasonable grounds to know the nature of the act or practice. It also is prohibited for any person to, directly or indirectly, enter an order or execute a trade in a security for the purpose of creating a false or misleading impression of trading activity or interest in the purchase or sale of the security; or an artificial bid price, ask price or trade price for the security or any related security.

Article (49) of the Capital Market Law considered any person in violation of this Law if he intentionally does any act or engages in any action which creates a false or misleading impression as to the market, the prices or the value of any Security for the purpose of creating that impression or thereby inducing third parties to buy, sell or subscribe for such Security or to refrain from doing so or to induce them to exercise, or refrain from exercising, any rights conferred by such Security.

CMA announced earlier this year that pursuant to the High Order No. (4690) and dated 6/2/1435 which states transferring the jurisdictions of the related parties and  committees in relation to the investigation and prosecution of criminal offences to the Bureau of Investigation and Public Prosecution, an agreement was made with the Bureau of Investigation and Public Prosecution and the jurisdiction to investigate the violations of Articles (31),(49) and (50) of the Capital Market Law and the public prosecution of them was transferred to the Bureau of Investigation and Public Prosecution starting from 26/01/1436H.

The Capital Market Law stated in clause (c) of Article (57) that in addition to the penalties and financial compensation provided for under this Law, the Committee for the Resolution of Securities Disputes may, based on a claim filed by CMA, punish the persons who violate Articles 49 and 50 with imprisonment terms not exceeding five years.