The Capital Market Authority of Saudi Arabia (CMA) is the Kingdom of Saudi Arabia's government's financial regulatory authority responsible for capital markets locally. The CMA is a government organization applying full financial, legal, and administrative independence.
The CMA’s functions are to regulate and develop the Saudi Arabian Capital Market by issuing required rules and regulations for implementing Capital Market Law provisions. This includes controlling the Tadawul, Saudi Arabia's stock exchange. The primary objectives are to create an appropriate investment environment, boost confidence, reinforce transparency and disclosure standards in all listed companies, and protect investors and dealers from illegal acts in the market.
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 the transactions of securities.
Develop appropriate measures to reduce risks on 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 the full disclosure of information related to securities and issuers.
Brief History of the CMA
The Capital Market in Saudi Arabia unofficially started in the early fifties and continued to operate in that way until the Kingdom's government set its necessary regulations in the eighties.
The current Capital Market Law was promulgated under Royal Decree No. (M/30) dated 2/6/1424H, which formally brought the Capital Market Authority (CMA) into existence.
The CMA is a government organization applying full financial, legal, and administrative independence and directly links with the Prime Minister.
Tadawul: Saudi's Stock Exchange
The Saudi Capital Market Law provided for establishing the “Saudi Stock Exchange” as a Joint Stock Company that operates as the only authorized entity to carry out the trading of securities in the Kingdom of Saudi Arabia.
The exchange operations are conducted through Tadawul, purporting to continuously develop a full-fledged security market that provides comprehensive and diverse financial services to compete internationally. Consistent with its mission to produce top quality and highly efficient securities exchange market products and services, the exchange constitutes an added advantage for all beneficiaries and participants.
CMA's Strategic Plan "Financial Leadership Program" (2019-2021)
Through the "Financial leadership program", the CMA seeks to position the Saudi capital market as a leading Middle East market and turn the local market into an advanced and attractive domestic and foreign investment one.
The program consists of four main pillars:
Facilitating Funding: Deepening the Capital Market and Promoting its Role in Raising Capital.
Encouraging Investment: Supporting the growth of asset management and promoting institutional investment.
Promoting Confidence: Reinforcing the Capital Market's Regulatory Structure.
Building Capacities: Supporting the development of market participants.
The program aims to achieve the objectives and initiatives of the second pillar, the Financial Sector Development Program (FSDP), by deepening the financial market, developing the Sukuk and debt instruments markets, enhancing the role of funds in financing the national economy, supporting the growth of asset management industry and enhancing institutional investment. Emphasize market attractiveness, diversify investment products, and encourage investment and facilitate it to investors.
Further, the program will enhance the Saudi financial market's role in providing financing, developing infrastructure, improving market stability, raising the level of governance and transparency in the financial market, and raising awareness and investment culture for market participants through the enhancing capital market data availability.
The program also focuses on developing the regulations and the Saudi financial market's regulatory environment, enhancing justice, ensuring investor protection, and enhancing adherence to international standards to enhance attractiveness and competitiveness. Find a document on the plan here.
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