Capital Market Law amendments to attract foreign investments, reduce risks: El-Kuwaiz

Amendments to Saudi Arabia’s Capital Market Law aim to enhance the Capital Market Authority’s (CMA) role in protecting the rights of investors, Mohammed El-Kuwaiz, Chairman of CMA, said.

These amendments are also aimed at keeping pace with global capital markets’ developments and contributing to the development of institutions operating in the capital market.

The amendments will also help develop mechanisms for compensating affected investors in the capital market, and facilitate the process of receiving due compensations and fast track the related procedures.

In addition, the newly-amended rules will enhance the efficiency, attractiveness and integrity of the capital market.

Fairness will also be ensured in securities transactions, in light of the penalties set out by the Capital Market Law.

In addition, the CMA was granted some additional authorities to address violations and enhance deterrence, El-Kuwaiz added.

The amendments will help develop the capital market infrastructure institutions and reduce risks, in addition to enabling new classes of securities and attracting foreign investments.

To this end, the CMA was authorized to license the capital market infrastructure institutions, which include the Exchange, the Depositary Center and the Clearing Center, in addition to regulating the securities clearing center and promoting its role in performing duties and obligations within the capital market infrastructure institutions.

The CMA also gives a priority to the review and continuous improvement of the regulatory environment, based on their importance and impact on the growth and development of the capital market and its institutions.

This will help achieve the CMA’s vision for the Saudi capital market to become the leading market in the Middle East and rank among the top ten markets in the world.

Elsewhere, El-Kuwaiz added that the CMA took into account the recommendations of the Financial Sector Assessment Program (FSAP), which was carried out over the Saudi financial sector.

It will also focus on enhancing the level of compliance with the standards of the International Organization of Securities Commissions (IOSCO), especially that the Kingdom is an official member.

“The CMA plans to license other entities to provide activities of exchanges, depositories or clearing houses,” El-Kuwaiz concluded.