Arab News, Saturday, Jan 07, 2023 | Jamadi Al Thani 14, 1444
Capital Market Authority approves amended prudential rules for Saudi Arabia
Saudi Arabia:
Saudi Arabia’s Capital Market Authority has
signed off on new rules aimed at attracting more investment into the Kingdom’s
economy.
The main changes include updating the prudential
requirements for carrying out any securities business, such as credit, market,
operational and concentration risks.
There are also amendments to the methodology used
to calculate the minimum limit of capital adequacy, and changes to the
requirements for investment management, arrangement, and advisory activities to
be based on expenses.
The Amended Prudential Rules will come into effect
on April 1 2023.
According to a report on SPA: “Amending the
Prudential Rules comes as part of the CMA's keenness, since its inception, on
continuously regulating and developing the entities, subject to the CMA's
control, which carry out any of the securities business, enhancing the control
procedures and prudential level of such entities, in addition to raising the
efficiency of the resources management of such institutions to provide optimum
services to their customers in accordance with the best international
practices.”
In 2013 the CMA initiated the application of
Prudential Rules on institutions carrying out the securities activities with the
aim of specifying a minimum limit of capital requirements to ensure the
availability of required financial resources and limiting the size of risks that
may be incurred.
The decision comes a month after the CMA approved
regulations put forward by the Saudi stock exchange involving market-making
procedures.
That move, in December 2022, aimed to regulate the
activities of listed securities market-making, through providing continuous
listed securities buy/sell orders during the market open session to provide
liquidity to the relevant listed securities.
Also, among the conditions of the market-maker, it
shall have a membership of the market or derivatives market and shall have the
written policies and procedures to separate between the market making activities
and any other activities practiced by the maker.