The objectives of the Anti-money laundering and counter-terrorist financing rules are that all authorized persons and registered persons must comply fully with the controls and procedures issued by the Capital Market Authority to ensure that: 1- fully apply the Anti-Money Laundering Law issued by Royal Decree No. M/39 dated 25/06/1424H and its implementing Regulations, and apply the requirements of the following:• FATF’s40 Recommendations and 9 Special Recommendations dealing with anti-money laundering and combating the financing of terrorism, • The International Convention for Suppression and financing of Terrorism (New York 1999)• The United Nations Convention on Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Vienna 1988) • The United Nations Convention on Organized Crime (against transnational) (Palermo 200) • The UN Security Council Resolutions 1267 and 1373 and successor resolutions related to combating terrorist financing. 2- the credibility, integrity and reputation of the capital market is maintained.3- Authorised Person and their clients are protected from illegal transactions involving money laundering, terrorist financing or other criminal activity.
Subscription is limited to Saudi nationals “individual investors” which also includes a Saudi divorcee or a Saudi widow who has children from a non-Saudi husband. She is also entitled to subscribe in their names for her benefit as long as she tenders proof of her status and motherhood of children under 18 years. Whoever subscribes in his divorcee’s name, the subscription is considered void. It is also forbidden to sell shares subscribed through IPOs to other persons in other countries except Saudi Arabia.
A fundamental analysis focuses on two aspects:
A – Study of various economic factors such as inflation and interest rates, labor, and GNP to reach an expectation about the direction of the national economy in the future.
B- Analysis of the historical data for the company as shown in its balance sheet, income statement and cash flow statement to reach an expectation about the financial position and future performance of a company and the movement of its stock prices.
A complete list of Authorized Persons (APs) is available on CMA’s website as well as on the website of the Saudi Stock Exchange (Tadawul). Or if you wish, you can follow this link:http://www.cma.org.sa/En/Pages/AuthorisedPersons.aspx
The duration between the dissemination of financial statements and the date of the general assembly for companies must not be less than 25 days.
Manipulation is when any person intentionally does any act or engages in any action which creates a false or misleading impression as to the market, the prices or the value of any Security for the purpose of creating that impression or thereby inducing third parties to buy, sell or subscribe for such Security or to refrain from doing so or to induce them to exercise, or refrain from exercising, any rights conferred by such Security.
There are various forms of manipulation such as undertaking transactions in Securities which do not involve a true transfer of ownership thereof, entering an order or orders for the purchase of a particular Security with prior knowledge that an order or orders of substantially the same size, price and timing for the sale of the same Security has been or will be entered by a different party or parties. Another form is entering an order or orders for the sale of a particular Security with prior knowledge that an order or orders of substantially the same size, price and timing for the purchase of the same Security has been or will be entered by the same party or different parties.
All of these acts are forbidden according to CMA’s Market Conduct Regulations.
Practicing brokerage in the stock market requires a license from CMA. Whoever practices brokerage without a license is subject to punishment as per Article 60 of the Capital Market Law. To view the full article, you can go back to the Capital Market Law.
Cumulative voting allows small investors the right to choose members of the board. This specific type of voting gives every voter a capacity of vote, according to the number of shares he or she owns which enables that person to vote for one candidate or divide his/her vote between those who he /she chooses without any duplication of these votes. This also enables the minority of stakeholders to be represented in the board of directors by cumulating their votes for one representative. By using this method of voting, investors can either divide their votes between candidates for the board, or having their votes accumulated and it focused on one particular candidate for representing them in the board.Minority Shareholders is meant by shareholders who represent a class of shareholders that does not control the company and hence they are unable to influence the company.
Assets under management include: Assets owned by the applicant or its group for the purpose of investment. And in relation to investment funds, including assets owned by the foreign portfolio manager or its group for the investment purposes; and Assets managed by the applicant or its group for the account of another person or persons. And in relation to investment funds, including assets owned by the foreign portfolio manager or its group for the account of another person or persons.
The term "group" is defined in the in the Glossary of Defined Terms Used in the Regulations and Rules of the CMA as: "in relation to a person, means that person and each affiliate of it". It defines the term “affiliate” as: “a person who controls another person or is controlled by that other person, or who is under common control with that person by a third person. In any of the preceding, control could be direct or indirect”. The Glossary of Defined Terms Used in the Regulations and Rules of the CMA also defines the term “control” as: “the ability to influence the actions or decisions of another person through, whether directly or indirectly, alone or with a relative or affiliate (a) holding 30% or more of the voting rights in a company, or (b) having the right to appoint 30% or more of the members of the governing body; “controller” shall be construed accordingly”.