​The Saudi Arabian Monetary Agency (SAMA) and The Capital Market Authority (CMA) signed a Memorandum of Cooperation (MoC) yesterday for greater cooperation between the two bodies to reinforce supervision on the entities they supervise according to their legal powers and to develop the financial sector and its stability.

According to the MoC – signed by CMA Chairman & CEO Dr. Abdulrahman Al-Tuwaijri and SAMA Governor Dr. Fahd Al-Mubarak – CMA and SAMA will cooperate in several areas such as supervision and surveillance, regulating corporate governance and deciding accounting standards and risk management, organizing securities offering, securities settlement, organizing the merger and acquisition of companies, control and ownership boundaries, and exchanging information and data.

In the area of supervision and surveillance, the MoC specifies that both parties shall cooperate before issuing or updating rules and regulations or manuals of common interest. They will also cooperate before taking any steps to ensure the stability of the financial sector in Saudi Arabia.

With regard to corporate governance, both parties will cooperate in the area of organizing corporate governance for companies whose shares are publicly listed and work in the banking sector, insurance sector, and other sectors supervised by SAMA. They will also work together to develop the appropriate accounting standards for these companies. Furthermore, CMA and SAMA will cooperate in the area of issuing securities, organizing merger and acquisition as well as control and ownership boundaries for these companies.

In the area of settlement of securities, the MoC specified that SAMA and CMA shall work together to develop the appropriate mechanisms to settle financial payments. They will also cooperate in exchanging information and data related to companies each of them supervises according to their activities.

Both parties also agreed to establish a high level standing committee which will have the responsibility of overseeing the implementation of the points agreed upon in the MoC. The committee will meet regularly or at the request of any of the two parties to discuss relevant issues.

The MoC is considered to be a positive step of coordination between financial governmental bodies in Saudi Arabia to develop the financial sector and ensure its efficiency and prosperity.