CMA Board has issued its resolution dated 19/08/1438H corresponding to 15/05/2017G on publishing the draft regulation of Class Action Suits (the draft) for public consultation on CMA website.
This draft comes under the CMA several initiatives aiming at facilitating the litigation procedures for the participants in the Exchange. A Class Action Suite is defined as "a suit filed by one or more plaintiff (Lead Plaintiff or Lead Plaintiffs) against one or more defendants on behalf of themselves and a group of persons who share identical or similar suit in term of the legal bases, grounds and merits. Any decision issued shall affect all parties".
The draft, to be incorporated in the Resolution Of Securities Disputes Proceedings Regulations once approved, aims at facilitating the litigation procedures of suits where the plaintiff is a large group of persons who share the same grounds and legal issues; this fits the nature of listed companies and the size of their shareholders.
The draft includes many detailed provisions which pay heed to explaining the mechanisms and procedures of the Class Action Suit and the rights of its parties such as the provisions of registering the Class Action Suit, criteria of accepting a suit as a Class Action Suit and the joining of new plaintiffs after the suit is filed, regulating the representation of plaintiffs and restriction thereon, the right of the parties of the suit, criteria of selecting the Lead Plaintiff and Lead Appellant, regulating the withdrawal and settlement procedures and the role of the committee in managing the Class Action Suit.
With regards to selecting the Lead Plaintiff, the draft prescribes the criteria upon which he/she is selected by the Members of the Group of plaintiffs; such as being fit to take the actions in the Class Action Suit observing the rights of the Members of the Group of Plaintiffs by being capable to exercise such duties during all of the suite' phases and understand his/her duties towards the Group and fully informed of the suit's details and the related grounds
CMA emphasizes in its statement that the draft comes in line with the CMA's program to achieve (Saudi Vision 2030) which aims, in one of its initiatives, to develop and implement the litigation mechanism and procedures to meet the best international practices in order to promote the attractiveness of the Saudi capital market and minimizes the risks involved in investing therein; in addition to its role in reducing the time period needed to decide on compensation cases. This would ease the committees mission and focus investors efforts.
CMA stresses that all opinions and comments received from the public on the draft will be studied and considered for the purpose of approving a final version of the Class Action Suit regulating. The draft can be viewed on CMA’s website via the following link:
Class Action Suit