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CMA: Avoid Dealing with Unauthorised Persons to Do Securities Business
01/12/2015

​The Capital Market Authority (CMA) emphasizes the importance of limiting investors’ dealings in securities to Authorised Persons (institutions that are authorized by CMA to conduct securities business) and to not deal with unauthorised persons, whether they are individuals or institutions.

CMA states that anyone who conducts securities business without its authorization or approval as a violator of the Capital Market Law and its Implementing Regulations and is liable for penalties.

Furthermore, CMA urges all investors to immediately report, through its official channels, any unauthorized person that conducts brokerage business or gives recommendations to buy or sell listed shares via websites, blogs, social media, SMS, newspapers, TV channels or any other means of communication.

CMA also stresses that investors should make sure that the entities they deal with are authorized by the authority itself. Investors and participants in the capital market can review the Authorised Persons’ List on CMA’s official website www.cma.org.sa. The Authorised Persons’ List displays the names of all authorised institutions that have been licensed by CMA to conduct securities business in the capital market. The list also specifies the business in which the institution has been granted a license.

Unauthorised persons (individuals or institutions) are not allowed to collect money or conduct any securities business. This includes buying or selling securities, managing securities, consulting on corporate finance, or advising on the benefits or risks of dealing.
CMA urges all investors and participants in the capital market to not to invest any amount in a financial institution without first confirming that it had obtained all the necessary licenses to do so. This is to avoid any risks that may result therefrom.
In addition, CMA warns that all contracts and agreements that involve conducting securities business with an unauthorized person are considered void.

Last year CMA received 11 complaints in regard to securities business being conducted by unauthorised persons. This is a 72 percent drop from the number of complaints received in 2013 which was 39.