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The Capital Market Authority's (CMA) board of directors ratified amending one of the articles of the Capital Market Institutions Regulations, related to the returns on the client’s money deposited into their investment accounts with institutions under coverage.
The amendment came into effect from the date of its approval’s announcement, the market regulator said in a statement today, Aug. 22.
The amendment aims to enhance the provisions of Article (77) of the Capital Market Institutions Regulations by removing Paragraph (A). Instead, a new paragraph will be added to allow capital market institutions to provide a service to their clients through which the latter can capitalize on money deposited in their respective accounts by investing them in investment products and generating returns on them.
Accordingly, it is conditional for the capital market institution to obtain the client's prior written approval to leverage this service and its terms. Investments through this service should be Kingdom-wide, short-term, and entailing low risks. Additionally, institutions must comply with risk understanding and suitability requirements as per these regulations.
The approval of the amendments came following CMA's publication of the draft of “Amendment of One of the Articles of the Capital Market Institutions Regulations" on May 22 on the Unified Electronic Platform for Consulting the Public and Government Entities (Istitlaa), affiliated with the National Competitiveness Canter (NCC), and the CMA's website for public consultation.
The amended Article 77 of the Capital Market Institutions Regulations can be viewed via this link:
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