CMA: Prudential Rules Increases Discloser and Hedge Levels Against Credit, Market and Operation Risks in Financial Institutions

​The Capital Market Authority (CMA) raised the levels of safety and quality in the authorized persons businesses (financial institutions authorized by CMA) through the Prudential Rules that have been implemented since January 2013.

CMA ensured the application of the best practices and international standards as well as the requirements of Basel 2 &3 on these rules. An authorised person shall continuously possess a capital base which corresponds to not less than the total of the minimum capital requirements based on the size of the risks such as credit risks, market fluctuations and operational risks. Therefore, the minimum capital requirements increase with the increased exposer of the AP to those risks.

CMA’s data states that the number of the financial institutions authorised to work in securities business have reached 89 APs by the end of last year with a total of 15.7 billion Saudi Riyals as capital and 6.3 Billion Saudi Riyals in Revenues.