​The Capital Market Authority explained that amending the announcement period for the listed companies' financial statements is based on the Saudi Organization for Certified Public Accountants' board decision to implement the International Financial Reporting Standards (IFRS) on listed companies' financial statements for the fiscal periods starting on or after 1/1/2017. Since the disclosure requirements and the external auditor's report with a disclaimer of opinion are – based on the international accounting standards- more than what is required in the current applied standards and to insure the accuracy and integrity of the financial information, therefore, the period to announce the interim and annual financial statements is extended.

CMA announced last week the amendment on the announcement period for the interim financial statements (Quarterly) from 15 to 30 business days and from 75 business days to three months for the audited annual financial statements.

Capital markets' regulators seek to reach the balance point between a number of objectives. The most important of which is to protect investors, disclose financial information that help the investor in evaluating a security in the shortest time possible and to prevent insider trading. These objectives are achieved by quickly announcing the financial statements. On the other hand, the importance of the integrity of the financial  statements whether in its preparation and approval period by the company's board of directors or the period given to the external auditor to review it are all objectives that need more time to be done perfectly.

The Authority ensured that the amendment decision was made after conducting comparative studies on the announcement periods for financial statements in a number of capital markets around the world.  That is, in addition to, the suggestions of the certified public accountants presented during the meeting with the CMA Board. The comparative studies showed that the period in the Saudi Market is the lowest compared to the United States of America, United Kingdom, United Arab Emirates, Egypt, Jordan, Qatar, Malaysia, Hong Kong and Brazil. The annual statements' period in some of these markets is four months while the interim financial statements (quarterly) period is 60 days.

The comparative studies done by CMA showed that the annual statements' announcement period in the American market is 60 calendar days, 75 calendar days and 90 calendar days after the end of the fiscal year (depending on the company's ranking) while the quarterly statements' announcement period is 40 and 45 calendar days after the end of the fiscal period for the quarter (depending on the company's ranking).

As for the Emirates, the period for the annual statements is 120 calendar days starting from the end of the fiscal year, while the announcement period for the quarterly statements is 30 calendar days starting from the end of the fiscal year. In Brazil the annual financial statements' period is three calendar months for local companies and 4 calendar months for foreign companies while the announcement period for the quarterly statements is 30 calendar days. In Malaysia, the annual financial statements' period is four calendar months and 60 calendar days for the quarterly statements.

What supports this decision is that a number of the listed companies on the Saudi Stock Exchange have investments in subsidiaries and cannot issue its financial statements without the issuance of the audited financial statements of those subsidiaries which are investing inside and outside the Kingdom. This requires an extension to the current period for the financial statements announcements. The extension is in line with most of the international practices and experiences in transforming to apply the international financial standards.

The Authority emphasizes that it is continuously reviewing the rules and regulation when needed in order to develop the local capital market and enhance its efficiency. That is based on the Capital Market Law which mandates the Authority to regulate and develop the capital market and enhance the securities trading methods, protect investors from unfair and illegal practices that include manipulation and fraud or insider trading, and work towards achieving fairness, efficiency and transparency in securities transactions and the development of regulations that limit the risks associated with securities dealings.