The Capital Market Authority (“CMA”) called upon relevant and interested persons participating in the capital market on the Draft Amendments of the Implementing Regulation of the Companies Law for Listed Joint Stock Companies (“Draft”) for public consultation for a period of (30) calendar days ending on 30/12/1445 corresponding to 06/07/2024.
The Draft aims to develop the provisions regulating the buyback or selling of shares by listed companies to grant more flexibility and improve the execution of the buyback or sale of these shares. Additionally, this aims to reduce the restrictions imposed on them, which will positively impact the efficiency of investment in the Saudi capital market in line with global practices.
The proposed amendment provides greater flexibility by developing the regulations for buyback or selling shares of listed companies, by removing the link between the quantities of companies buying or selling their shares during one trading day to the approved quantity, stipulating instead that the buybacks or sales in a single trading day should not exceed 25% of the average daily trading volume of the company’s shares over the last five trading sessions preceding the buyback or sale.
It is worth noting that the regulations of the Companies Law for listed joint stock companies specify the approved quantities of shares that a company can buy or sell. These are the purchase quantities determined and approved by the extraordinary general assemblies of listed companies or the sale quantities of treasury shares determined and approved by the board of directors, provided it did not conflict with the assembly’s buyback decision. The boards of directors must complete the purchase process within a maximum of 12 months from the date of the assembly’s decision.
The Draft is part of the CMA’s efforts to develop the capital market and regulate trading operations, whether in the purchase or sale of treasury shares by listed companies.
The CMA announced that the comments of relevant and interested persons shall be taken into full consideration for the purpose of finalizing the draft amendments. Such comments can be posed through any of the following:
- The Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform “Istitlaa”), affiliated with the National Competitiveness Canter (NCC) through the following link: (istitlaa.ncc.gov.sa)
- The prescribed form through the following email: (Laws.Regulations@cma.org.sa).
Contact:
Capital Market Authority
Communication & Investor Protection Division
+966114906009
+966557666932
Media@cma.org.sa
www.cma.org.sa
About CMA:
The Capital Market Authority (CMA) in Saudi Arabia unofficially started in the early fifties, and continued to operate successfully, until the government set its basic regulations in the eighties. The current Capital Market Law is promulgated and pursuant to Royal Decree No. (M/30) dated 2/6/1424H, which formally brought it into existence. The CMA is a government organization applying full financial, legal, and administrative independence, and has direct links with the Prime Minister.
For more information about CMA, please visit the official website: www.cma.org.sa
