The Capital Market Authority (“CMA") reported that the value of compensation for those affected by errors and violations in securities disputes leapt 4275% to reach SAR 2.2 billion during the last 4 years, as the value in 2022 reached SAR 1.75 billion, compared to SAR 40 million in 2019, before the value hiked to SAR 93 million in 2020, then to SAR 367 million in 2021. The total number of compensated persons reached 2,352 persons during the last 4 years, as the number reached 1,294 persons in 2022, an increase of 2057% more than the recorded total number in 2019 that reached only 60 persons, then increased to 445 persons in 2020 and reached 553 persons in 2021.
The size of compensation in the class action suits climbed to SAR 1.225 billion in 2022, representing 70% of total compensations awarded finally (resolution and appeal). Also, the compensation against violators of the Market Conduct Regulations and Article (49) of the Capital Market Law surged to reach SAR 323.5 million in 2022, an increase of 18% compared to 2021, which recorded SAR 274.4 million. Further, the value of compensation against persons carrying out securities business without authorization hiked 202% to reach SAR 53.2 million in 2022, compared to SAR 17.6 million in 2021. The value of compensation against listed companies increased to SAR 52.9 million in 2022, an increase of 300%, compared to 2021. Also, the value of compensation against market institutions amounted to SAR 37.5 million in 2022, while other compensations recorded SAR 59.7 million by the end of 2022.
In this regard, the Communication & Investor Protection Division General Director, Ali Bin Sulaiman Aldakheel, reported that the increase in the pace of compensation of those affected by errors and violations in securities disputes comes in line with the collaboration efforts of the concerned parties, enabling public and private rights, and the coordination efforts between CMA's board and the General Secretariat of the Committees for Resolution of Securities Disputes (GS-CRSD), which resulted in reducing the litigation period from more than 2 years, before 2019, to less than 8 months today. Also, the class action projects, developed for the first time in the Kingdom at CRSDs, to be the main method to enable investors to collect their rights via the judiciary system in a more efficient way and with fewer costs and efforts. The record hike in the value of compensation and number of compensated persons comes in line with CMA's continuous devotion to achieve the principle of justice and to raise the confidence of investors in the capital market to attract more investments.
CMA has developed an updated technical system for investor protection via a website designated for this purpose to submit complaints, reports, requests for joining class actions or requests for financial compensation for affected investors who were awarded a compensation decision issued by CRSD.