CMA has world’s best monitoring systems, fights all types of manipulations: Official

Abdulaziz Al-Mojil Head of CMA's Monitoring and Market Analysis Department

Trading halls, where buy and sell transactions are executed on the Saudi Exchange (Tadawul), are closely monitored by the Monitoring and Market Analysis Department, which plays a key role in the capital market working system.

Abdulaziz Al-Mojil, Head of the Monitoring and Market Analysis Department told Argaam that the Capital Market Authority (CMA) is constantly monitoring all transactions executed through the Tadawul systems to protect investor interests. This is attained through an accurate work system and close monitoring of any transaction that could be turned into manipulation, the official added, warning that some recommendations on social networks could turn into manipulations in specific cases.

He added that the CMA uses the latest monitoring systems adopted globally, noting that the Monitoring and Market Analysis Department receives several alerts on a daily basis about potential manipulations, which are analyzed and tracked by trained cadres to spot any attempted manipulation.

Speaking of the regulations and provisions, which show that the CMA assumes its role, the official said: “The Monitoring and Market Analysis Department works mainly on monitoring the violations of Articles 49 and 50 of the Capital Market Law. Article 49 prohibits any person from intentionally engaging in or participating in any misleading or false impression about the market, or the price or value of securities. Moreover, Article 50 bans any person from disclosing insider information or insider trading in the market.”

Al-Mojil also explained some details about the law, which entail the CMA’s monitoring role. The market conduct regulations in Articles 2 and 3 provide various examples on prohibited trading behavior, such as intentionally impacting the closing price of any security and individually or jointly impacting the securities prices. Other examples include influencing society and market participants for personal objectives to affect securities prices.

Moreover, the CMA recently announced investigating many stock manipulations and referred suspects to the Public Prosecution.

Elsewhere, the official said that technical or fundamental analysis of securities is not deemed as a violation of the Capital Market Law, unless it is linked to receiving a financial consideration in return for analysis or providing technical analysis services to impact the price of securities for personal purposes.

Among the tools used by the CMA is the Nasdaq Trade Surveillance Software (SMARTS) to watch and analyze trading activities in the capital market. This system includes several applications with advanced tools to display the market data and enable analysts to efficiently watch and study securities.

The system also includes alerts and other tools that provide an interactive concept of trading and dealers’ market behavior. Other tools are used to review market dealings, and investigate and analyze transactions, in addition to reports that help collect evidence to prove violations.

The system sends an average of 200 alerts daily. These alerts show potential manipulations, but do not necessarily point to a violation, which is the role played by the department’s team.

The CMA monitors the suspected cases referred thereto by capital market institutions. The CMA provided a monitoring system at those institutions to monitor their clients’ dealings.