Aljadaan: continuous efforts to raise levels of disclosure and transparency

​CMA to issue the Rules for Qualified Foreign Financial Institutions Investment in Listed Shares

Trading shares of a listed company suspended if certified public accountant’s report on preliminary or annual financial statements include a disclaimer of opinion or an adverse opinion.

Total amounts raised from securities offerings up by 15.3 percent to SR69 billion during 2014

In his introductory speech in CMA’s Annual Report for the fiscal year 2014, Mohammed Abdullah Aljadaan, chairman of the Capital Market Authority, summarized CMA’s performance and accomplishments in the last year as well as the initiatives it aims to achieve in the future.

Aljadaan explained that one of the most important achievements last year was developing and approving CMA’s strategic plan for the five-year period (2015-2019). The plan includes thirteen goals which are broken down into four main strategic themes: foster capital market development, promote investor protection, improve the regulatory environment and enhance CMA’s organizational excellence.

He said that during the preparation of the strategic plan, the most important challenges to the capital market, its needs, other influential factors, as well as the views and comments of specialists at the CMA and those of market participants such as listed companies, authorized persons (APs) and investors have been studied and taken into consideration.

As for CMA’s accomplishments during 2014, the chairman explained that CMA continued its efforts to develop and regulate the capital market by approving the Credit Rating Agencies Regulations which would be implemented from September 1st, 2015.

In terms of strengthening disclosure and protecting investors, CMA’s board issued its resolution to suspend trading the shares of a listed company if the certified public accountant’s report on its preliminary or annual financial statements included a Disclaimer of Opinion or an Adverse Opinion and it will be lifted after removing the Disclaimer of Opinion or an Adverse Opinion from the financial reports.
The chairman also said that CMA will issue the Rules for Qualified Foreign Financial Institutions Investment in Listed Shares and update the Investment Funds Regulations. The teams working on these two projects are reviewing and studying all the comments and observations received from the public and interested parties and are updating the regulations for approval.

On another note, 2014 witnessed an increase in the public offering of shares as its operations exceeded SR25.2 Billion with a 1185.9 percent increase from 2013. Total amounts raised from securities offerings reached SR69.1 billion up by 15.3 percent from 2013.
As part of its continuous efforts to protect investors, CMA has started applying its board’s resolution to adopt the Instructions and Procedures Related to Listed Companies with Accumulated Losses reaching 50 percent or more of its capital. By the end of 2014, the number of companies reached with accumulated losses reached 12 companies, of which 4 companies with accumulated losses of 75 percent or more.

Aljadaan pointed out that last year CMA continued to monitor websites and social media networks using the latest monitoring tools to detect violations of the Capital Market Law and its implementing regulations. CMA recorded an increase in alerts on irregularities in the electronic media, which increased by 23 percent from the year 2013. This caused CMA to increase its efforts to intensively search these methods, and such efforts rose by 66.6 percent from 2013 . CMA also continued its cause and cycle inspection visits on the Authorized Persons (APs). The number of licenses covered by inspections in 2014 were 161 licenses pertaining to 56 APs.
As part of its efforts to resolve investors' complaints, CMA settled 485 cases in 2014, up 39 percent from 2013. It also prepared notifications for 112 complaints it received to enable persons or institutions with complaints to continue pursuing their case before the Appeal Committee for the Resolution of Securities Disputes.

Aljadaan concluded by thanking Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud; Crown Prince Muqrin bin Abdulaziz Al Saud, Deputy Premier; Prince Mohammed bin Naif bin Abdulaziz, deputy crown prince, second deputy premier and minister of interior and Prince Mohammed bin Salman the minister of defense, president of the royal court and special advisor to the custodian of the two holy mosques for their support and care.