CMA Regulatory Entity

The CMA started operating informally in the ’50s and kept on working effectively until, in the ’80s, Saudi Arabia set the CMA’s fundamental guidelines.

Thus, the current CMA Law is declared and, as per Royal Decree No. (M/30) dated 2/6/1424H, officially bringing the CMA into existence.

The CMA is a government association stating complete financial, legal, and administrative independence. The CMA is in direct correspondence with the Prime Minister.

Purpose of CMA

The CMA’s roles are to manage and foster the Saudi Arabian Capital Market by stating essential rules and regulations for carrying out the requirements of Capital Market Law.

The core purpose of CMA is to establish a proper investment environment, enhance confidence, and support straightforwardness and divulgence guidelines in all listed companies. In addition, it shields the people from unlawful acts in the market.

The CMA is entrusted with the following obligations: to manage and foster the capital market and advance proper principles and procedures for all areas and entities involved with Securities Trade Operations.

It maintains reasonableness, effectiveness, and straightforwardness in security exchange.

It also fosters proper measures to lessen risk relating to securities transactions; protect the public and investors from illegal and fraudulent activities; develop, direct and monitor the issuance of securities and under-trading transactions.

It monitors the activities of organisations working under CMA. It regulates full disclosure of information persistent to securities and guarantors.

The Saudi CMA Law accommodates the “Saudi Stock Exchange” foundation as a Joint Stock Company that works as the only approved authority for securities exchange in Saudi Arabia.

The Stock Exchange operations are conducted through the Saudi Stock Exchange (Tadawul), consistently fostering a complete and up-to-date security exchange market that provides extensive and diverse monetary administrations to compete globally.

Consistent with its main objective to deliver top-of-the-market and profoundly proficient securities exchange market products and services, the exchange establishes to be beneficial for all the recipients and members in the market.

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CMA’s Board

The authority comprises five Commissioners appointed by the Royal Decree and multiple Executive level members.

Securities Depository Center

The CMA Law accommodates the foundation of the Securities Depository Center exclusively dependent on executing transaction deposits, clearing, transfers, and registering ownership of securities traded on the exchange.

The Saudi Stock Exchange currently works the functions of the Securities Depository Center.

Governance Board

The CMA Board looks to carry out the best corporate administration practices in playing out its administrative capacities by focusing on delicate issues which are not regular and growing correspondence and participation of related groups.

The ideal accomplishment of applying the board administration model accomplish the following:

give departments authority to take routine decisions
focusing more on sensitive and significant areas such as risk assessment, policy development
keep the board’s work limited to different roles
participating in both international and national conferences and committees, ensuring the authorities functions and evaluation of its performance
increased communication with government offices and stakeholders

Advisory Committee

The authority enhances its performance and accomplishes its objectives through effective communication and a regulated system. Because of the Capital Market Law, the CMA board approved the CMA Advisory Committee.

The committee provides ideas, suggestions, and perceptions on the board’s topics to study, observe, and monitor the market and its participants on new rules and regulations.

The committee will also provide suggestions and sentiments to add to the market’s progression and provide investor security. The committee involves various part-time individuals from marker participants, specialists, and trained professionals.

CMA Organizational Structure

The organisational structure of CMA is as follows:

Listed Companies & Investment Products Deputy

This department controls the offering of securities, collective investment schemes and provides supervision to achieve CMA objectives of fair investor outcome, market respectability, and financial steadiness.

The department helps improve, form, and execute successful administrative systems for collective investment schemes and the auto industry.

It helps in:

establishing an administrative framework for the securities markets
dealing with all applications for securities offerings and regarding new Collective Investment Schemes to Saudi’s
Manage M&A activities and applications; keeping the market following Investment Funds Regulations; reporting to the Board on Deputy’s and Department’s accomplishments, executions and actions
administering all organisation disclosures and announcements and Collective Investment Scheme activity, all according to the applicable Regulations
identifying and managing risks and policies; providing suggestions on Islamic Finance framework.

Corporate Resources Deputy

The Departments guarantee that fundamental Human Resources, Financial Resources, Information Technology, and other foundations are accessible adequately, ensuring the organisation work successfully and productively.

The department manages all CMA internal finances and ensures compliance with Accounting standards and Saudi Regulations; ensure that Human resources are carefully utilised, trained, and are up to a high standard.

The firm ensures facilities and services are of high quality.

It provides excellent hospitality to guests and visitors; dealing with all vendors, providers and logistics activities; ensuring high quality IT support is available to all end-users, and all actions against criminal activities are up to CMA standards.

Market Institutions Deputy

The Market Institutions Deputy ensures that Market Institutions entering the market are fit, appropriate, and monitored regularly. The Deputy also leads the observation of market trading activity.

The Division handles all license and registration applications; progression of regulatory standards of the market; undertaking thorough oversight of Market Institutions to guarantee their consistency with the CML and its executing Regulations; identifying criminal activities and reporting them; conducting market surveillance and analysis; meeting Market Institutions Compliance; supervising Market Infrastructure Institutions.

Strategy and International Affairs Deputy

The Strategy and International Affairs adds to accomplishing CMA’s objectives by managing Institution’s development, policy and direction processes and project management capabilities; coordinating regulatory policy development; forming and implementing strategies; thorough research and analysis; looking after CMA’s International Relations and Organizations, and Data Management Office.

Conclusion

The authority is set on its path in ensuring an efficient and appropriate environment for the Investors and issuing required rules and regulations to develop the Saudi Arabian Capital Market.

In addition, the authority will provide authentic knowledge and analysis on the market and protect the investors and public from illegal activities.

Categories: Global Regulatory Entities | Author: Jason Morgan | Date: 4 January 2022

Jason Morgan

Jason Morgan is an experienced forex analyst and writer with a deep understanding of the financial markets. With over 15+ years of industry experience, he has honed his skills in analyzing and forecasting currency movements, providing valuable insights to traders and investors.

Forex Content Writer | Market Analyst

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