The Capital Market Authority ("CMA") invited specialists, interested parties and the public to provide their comments and observations on the draft Instructions on Issuing Depositary Receipts out of the Kingdom for Shares Issued in the Kingdom ("Draft Instructions"), which is available on the CMA's official website for a period of (30) calendar days ending on 15/1/1440H corresponding to 25/9/2018G. The CMA assured that all comments and observations received will be taken in consideration for the purpose of finalizing the Draft Instructions.

The Draft Instructions comes in pursuance of the CMA's strategic objectives to deepen the capital market, raise its role in creating capital, promote institutional investment, and raise market attractiveness to foreign investors, and in accordance with the powers vested in the CMA under the Capital Market Law.

The Draft Instructions aims to set out the requirements and conditions for issuing depositary receipts out of the Kingdom for shares of an issuer in the Kingdom, including the requirements for the CMA's approval on issuing depositary receipts out of the Kingdom, the issuer's obligations, and the depositary bank's obligations.

The Draft Instructions defines depositary receipts as financial instruments listed and traded in a foreign market and issued by a depositary bank for shares issued in the Kingdom, and it specifies that the foreign market must be a regulated market for the trade of securities out of the Kingdom. It also provides that the depositary bank must be a financial institution licensed (or otherwise subject to regulatory oversight) by a regulatory authority and incorporated in a jurisdiction that applies regulatory and control standards equivalent to those of the CMA or acceptable to it.

The Draft Instructions set out the required information and documents to apply for the CMA's approval for issuing depositary receipts out of the Kingdom. The required information and documents included submitting a summary of a technical study that includes the objective of listing in the foreign market and the potential advantages and risks of such listing, a statement of the measures to be taken by the issuer to mitigate those risks, and a list prepared in coordination with a legal advisor that identifies any conflicts between the regulatory requirements in the Kingdom and the regulatory requirements in the foreign market that may have a material impact on the related listed shares.

It is also worth noting that the issuer's obligations under the Draft Instructions included its obligation to establish a mechanism for the distribution of voting rights related to shares to the holders of depositary receipts, in agreement with the depositary bank and in accordance with voting procedures set by the Depositary Center, and disclose to the public in the Kingdom any event to be disclosed to the public under the Capital Market Law and its Implementing Regulations and the Exchange Rules before disclosing such event in the foreign market.