As part of the Capital Market Authority's ("CMA") strategic objectives to develop the capital market and enhance the confidence of the participants in the Capital Market, and based on the Capital Market Law issued by Royal Decree No. (M/30) Dated 2/6/1424 H, the CMA Board issued its Resolution to publish the Draft Amendments to the Market Conduct Regulations ("Draft Amendments") for public consultation for a period of (30) calendar days ending on 13/4/1442H corresponding to 28/11/2020G.
The Draft Amendments aim to enhance the protection of investors in securities from unfair or unsound practices that involve fraud, deceit, or manipulation. It also aims to further develop the Capital Market’s statutory environment and promote Market stability, develop sufficient procedures to minimize risks associated with securities transactions, guarantee protection for investors, and enhance confidence in the Capital Market. Moreover, this comes in line with the international best practices and standards to support the market’s growth and prosperity.
The main elements of the Draft Amendments are:
a) Develop the provisions regulating the prohibition of behavior or practices involving manipulation or deceit, by clarifying that the scope of such behavior or practices shall include promoting the purchase of a security for the purpose of selling that security or promoting the sale of a security for the purpose of purchasing that security.
b) Develop the provisions regulating the prohibition of insider trading and disclosure of insider information for the purpose of including front running trades. The information related to the orders entered or, that will be entered, on a security will be considered, when the other criteria stated in part 3 of the Draft Amendments are fulfilled, as insider information upon which the Capital Market Law prohibits trading. This prohibition applies to, for example, but not limited to, a director, senior executive or employee of a capital market institution, and authorised signatory or agent over the accounts of natural or legal persons from both the public and private sectors.
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 finalising the Draft Amendments.
The Draft Amendments can be viewed via the following link:
Draft Amendments to Market Conduct Regulations
Prescribed form for providing comments
