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The Capital Market Authority Publishes Draft Amendments of the Corporate Governance Regulation for Public Consultation

​As part of the Capital Market Authority's ("CMA") strategic objectives to regulate and develop the Capital Market, and based on the Capital Market Law issued by Royal Decree No. (M/30) Dated 2/6/1424H, and the Companies Law issued by Royal Decree No. (M/3) dated (28/1/1437 H), the CMA Board issued its resolution to publish the amended Corporate Governance Regulation “Draft Amendments" for public consultation for a period of (30) calendar days ending on 26/7/1442H corresponding to 10/3/2021G.

The Draft Amendments aim to strengthen the internal controls of listed companies on the Exchange, and develop the provisions regulating board members' independence in line with best practices and international standards.

The main elements of the Draft Amendments are as follows:

a)      Changing the following Articles of the Corporate Governance Regulation related to internal audit's activities from “guiding articles" to “mandatory articles" aiming to strengthen listed companies' internal controls: 

  • Article 76 related to composing of an internal audit unit or department;
  •  Article 77 related to the internal audit plan; and
  • Article 78 related to the internal audit report.

b)      Amending Article 39 of the Corporate Governance Regulation relating to the board of directors' and the executive management training to include training and qualifying members of the committees formed under the Regulation thereof.

c)      Amending Paragraph (c) of Article 20 of the Corporate Governance Regulation by stating the cases related to businesses and contracts that are executed for the Company's account which negate the independence of an independent board member, and amending the scope of the definition of the term “relatives" in order to implement Article 20 of the Corporate Governance Regulation, in accordance with best practices and international standards.

The CMA, with full gratitude, would receive the opinions and comments of relevant and interested persons, through the prescribed form via the following email (Laws.Regulations@cma.org.sa).

All comments will be taken into full consideration for the purpose of finalizing the Draft Amendments.

The Draft Amendments can be viewed via the following link:

Draft Amendments to the Corporate Governance Regulations

Prescribed form for providing comments