What are the trading conducts that violate the law ?
You can refer to the Capital Market Law and its implementing regulations especially the “Market Conduct Regulations” which describes the violating conducts. Capital Market Law and its implementing regulations can be found on the CMA website www.cma.org.sa or you can request a printed copy from CMA’s headquarters.
What role does the Capital Market Authority have in the rise and decline of the market?
CMA seeks to protect investors and to achieve justice, efficiency as well as transparency in trading by detecting manipulative or detective practices in the CML and implementing regulations. As for the rise and decline of the market, it is governed by supply and demand only.
What are the duties and responsibilities of CMA?
CMA has a specialized department for that which is The Investors Complaints Department. It can be contacted through the following:
Telephone: 0112797070 or 0112797011
Fax:0112797066
Email: Investors.complaints@cma.org.sa
Mail To: P.O.Box 220022 Riyadh 11311 Kingdom of Saudi Arabia, Al Faisaliyyah Tower, King Fahad Road
or in person by delivering complaints to the following addresses:
1- Al Faisaliyyah Tower, 10th floor, investors Complaints Department.
2- CMA Head Office - King Fahad Road.
What is CMA’s role in following up on the companies’ results and financial reports?
CMA monitors the publishing of the financial statements and reports issued by the listed companies to make sure they are consistent with CMA’s requirements and regulations in terms of timing and the information published.
What is the role of the shareholders in keeping up with the decisions made by companies’ board of directors as well as the performance of the executive management?
Board members are representatives of the shareholders and owners to oversee the company’s management to carry out whatever may be in the general interest of the company and shareholders’. Hence, the responsibility of mentoring the performance is on the shareholders in the first place. It is done by electing the members appropriately and monitor their performance in addition to pursue the disclosed reports and hold them accountable in General Assemblies. The board of directors would not be exempt of neglect or abuse. Each shareholder have the right to question the companies’ board of directors and auditors . In addition, he has the right to vote on the resolutions of the General Assembly and to participate in its deliberations. Moreover, Board members are responsible for evaluating the executive management’s performance in the company.
If I traded some company’s stocks based on material information that I got from inside the company, would I be violating the law?
According to Article fifty of the Capital Market Law, any person who obtains, through family, business or contractual relationship, inside information is prohibited from directly or indirectly trading in the Security related to such information, or to disclose such information to another person with the expectation that such person will trade in such Security. No person may purchase or sell a Security based on information obtained from an insider while knowing that such person, by disclosing such insider information related to the Security, has violated the law.
I am a small investor that works until 2:30 p.m. and I trade from home through the internet so all my trading operations are approximately at the end of the trading period. Am I considered in this case trying to affect the closing price ?
It is shown, during the trading period, which trading is suspicious and which is not. Not everyone who trades in the last half hour is considered a violator of the law. The violation is in the conduct that aims to create a false and misleading impression.
Am I allowed to do one of the Securities Activities although I have my own business?
Yes, you can after getting a license to exercise Securities Activities from CMA.
What are the Sanctions and Penalties for Violations which are mentioned in the Capital Market Law?
The Capital Market Law violations are mentioned in detail in Chapter Ten “Sanctions and Penalties for violations” in articles 55 until 67 of the Capital Market Law.
Who has the right to file a compensation suit (private right) for the losses the investors incurred as a result to the accused committing the violation?
The affected person (the investor in the Capital Market) has the right to file a private right suit before the Committee for Resolution of Securities Disputes (CRSD), and claim compensation for the losses that he has incurred as a result of the violation against who is proved guilty of the violation.
Did the Law consist of specific limit periods for the right to file compensations suits (An individual right) related to the violations?
Yes, it did. Article 58 of the Capital Market Law says that “A suit under Articles 55, 56 and 57 of this Law shall not be heard if the complaint is filed with the Authority after the elapse of one year from the date when the claimant should reasonably have been aware of facts causing him to believe he had been the victim of a violation, and in no case may such complaint be heard by the Committee after five years from the occurrence of the violation subject of the claim.”
What are the litigating bodies that have jurisdiction over securities disputes?
Pursuant to Article Twenty Five of the Capital Market Law, the concerned bodies that have jurisdiction over securities disputes are:
a. The Committee for the Resolution of Securities Disputes (CRSD).
b. The Appeal Committee for the Resolution of Securities Conflicts (ACRSC).
What are the cases that fall within CRSD jurisdictions?
Pursuant to Article Twenty Five of the Capital Market Law, CRSD shall have jurisdiction over the following cases:
a. Public actions, which are brought against violators of the Capital Market Law and its implementing regulations as well as the violators of CMA and the Capital Market regulations, instructions and directives.
b. Private actions, which are brought by investors in securities against authorized persons, or cases that may arise between the authorized persons themselves.
c. Complaints against the legislations and decisions issued by CMA or the Capital Market.
d. Actions of emergent nature that are brought before CRSD for issuing injection decisions.
What should you do before filing a complaint with CRSD?
No complaint may be filed with CRSD without being filed first with CMA’s Department of Investors Complaints of the General Department of Enforcement. When the complaint is filed, the following is considered:
a. The passing of a period of 90 days from the filing date, after which you can directly approach CRSD.
b. CMA notifies the grievant otherwise of the permissibility of submitting the complaint to CRSD before the expiration of this period.
c. The grievant is notified by CMA of any of the above two matters.
