​The Capital Market Authority was established under the Capital Market Law pursuant to Royal Decree No. (M/30) dated 2/6/1424H corresponding to 31/7/2003  to be responsible for regulating and developing the capital market in the Kingdom. The CMA is a government organization applying full financial, legal, and administrative independence, and has direct links with the Prime Minister. The rules and regulations issued by the Authority cover all the legal aspects related to the Capital Market in the Kingdom and in line with the global rules and regulations.

Tasks and responsibilities

The CMA’s functions are to regulate and develop the Saudi Arabian Capital Market by issuing required rules and regulations for implementing the provisions of Capital Market Law. The basic objectives are to create an appropriate investment environment, boost confidence, and reinforce transparency and disclosure standards in all listed companies, and moreover to protect the investors and dealers from illegal acts in the market.

Duties and Authorities

The CMA is entrusted with the following duties:

• Regulate and develop the capital market and promote appropriate standards and techniques for all sections and entities involved in Securities Trade Operations.
• Protect investors and the public from unfair and unsound practices involving fraud, deceit, cheating, manipulation, and inside information trading.
• Maintain fairness, efficiency, and transparency in transactions of securities.
• Develop appropriate measures to reduce risks pertaining to transactions of securities.
• Develop, regulate, and monitor the issuance of securities and under-trading transactions.
• Regulate and monitor the activities of entities working under CMA.
• Regulate and monitor full disclosure of information related to securities and issuers.

The Capital Market Authority’s Board

The Board of the Capital Market Authority was reconfigured pursuant to the Royal Order number A/78 and dated 19/5/1430H to play the main role in managing the Capital Market Authority. In reference to Article Seven of the Capital Market Law, the CMA Board shall comprise of five members, who shall be natural Saudi Arabian persons working on a full time basis, and shall be professionally qualified. The Board members shall be appointed by Royal Order for five years, renewable once.  The Board shall exercise all authorities entrusted to the Authority in accordance with the provisions of this Law. The Board will specify how the Authority’s functions, responsibilities and operations will be organized among its divisions and departments. For fairness and transparency purposes, the Board members and CMA employees must disclose the securities they own or at their disposal or the disposal of one of their relatives. They are also prohibited from providing advice to other authorities whether public or private.

The CMA is governed by a Board of five (5) full-time Commissioners appointed by the Royal Decree:

• • Mr. Mohammed bin Abdullah Elkuwaiz Chairman
  • Mr. Youssef Hamad Al-Bilihid Vice Chairman
  • Mr. Ahmed Rajeh Al-Rajeh Member
    
  • Mr. Khalid Abdulaziz Al-Homoud Member
    
  • Mr. Khalid Mohammed Al-Sulea Member​​
    

Saudi Stock Exchange (Tadawul)

The Saudi Stock Exchange (Tadawul) is the securities market in the Kingdom of Saudi Arabia. It is the only authorized entity to carry out the trading of securities in the Kingdom of Saudi Arabia. Trading is done by buying and selling of listed securities through authorized brokers. The Capital Market Law states that Tadawul should be a joint stock company managed by a Board of Directors comprising nine members who shall be appointed by a Council of Ministers Resolution upon nomination by the chairman of the Board of the Authority. The board of directors of the Exchange shall appoint an executive manager with the approval of the Board of the Authority. The manager appointed shall not have the right to perform any other governmental or commercial work or to have any interest or ownership in any brokerage company on the Exchange. The executive manager may be removed from his position by decision of the board of directors of the Exchange.

The objectives of the Exchange include the following:

• Ensuring fair, efficient and transparent listing requirements, trading rules and technical mechanisms and information for Securities listed on the Exchange.
• Providing sound and rapid settlement and clearance rules and procedures through its Securities Depositary Center.
• Establishing and enforcing professional standards for brokers and their agents.
• Ensuring the financial strength and soundness of brokers through the periodic review of their compliance with capital adequacy requirements, and setting such arrangements to protect the funds and Securities in the custody of brokerage companies.

The Committee for the Resolution of Securities Disputes

The Capital Market Law stated in Article 25 that the Authority shall establish a committee known as the "Committee for the Resolution of Securities Disputes" which shall have jurisdiction over the disputes falling under the provisions of this Law, its Implementing Regulations, and the regulations, rules and instructions issued by the Authority and the Exchange, with respect to the public and private actions. The Committee shall have all necessary powers to investigate and settle complaints and suits, including the power to issue subpoenas, issue decisions, impose sanctions and order the production of evidence and documents. The Committee’s jurisdiction shall include claims against decisions and actions taken by the Authority or those awarding damages to investors for violating the Capital Market Law.

Authorised Persons

Any person authorized to carry out securities business by the Authority.

Investors’ Protection

Protecting the investors is one of CMA’s most important responsibilities. The Authority does it by setting and implementing the rules and regulations to regulate the securities market. The main framework of these regulations is to ensure a safe market with lower risks. CMA also aims to protect investors from unfair and unsound practices involving cheating, fraud, manipulation and insider trading. That is done by careful monitoring of the Authorised Persons, securities issuers and market trading in general. In addition to making all the information available for the public as it is one of the basic elements to protect investors. For that, CMA obliges all participants to disclose any information related to securities, financial statements, material developments, and the information important for prospectuses. Reviewing the information sources helps investors to take the best investment choice and protect themselves. Another way to protect investors by CMA is that it has a maximum limit for the brokers’ commission and it regulates the fees and other expenses imposed by the Saudi Stock Exchange (Tadawul) and the Depository Center.