23/11/2014
202 billion maximum share of foreigners in the market .. and 7 investment deny wrongdoing
« Market Authority » : studying the proposals on the list of foreign investment to announce finalist
Saudi capital market authority has initiated, in the study of the proposals received on a draft regulation on foreign investment eligible for the investment in the Saudi stock market, after the end of the survey, Thursday, November 20th, 2010. The financial market authority, has tabled a draft regulation 21 August last, to solicit opinions for 90 days, ended on November 20th, 2010. The market will open to qualified foreign institutions directly during the first half of next year 2015. He said for the ' economic ' BEC; official spokesman, said that by the end of the period of public consultation on the regulation of foreign financial institutions to invest directly in the stock market, the Commission will study these proposals and then announces the next step later.
Saudi shares lost about 158 billion market value, since the draft regulation on foreign investment to solicit opinions, resulting in a decline in the market value of companies market from 2.18 to 2.08 trillion riyals, although inclusion of the national commercial bank, during that period. Economic Audit to the draft regulation, the CMA series of actions up to the suspension and revocation of a foreign investor in ZBrush, and defamation, by publishing the identity of the foreign financial institution. The most prominent of these irregularities, the financial failure of the foreign investor qualifications or any of its customers or receiving a license to invest in the Saudi market based on false or misleading information, in addition to the foreign investor to regulatory penalties or legal in any State, or one of its clients, or start an investor in Saudi stock exchange listed within 30 days of registration.
According to the regulation, not the investor may cancel or suspend the license to purchase shares listed, after the cancellation of the license or suspension or dispose of any shares held in their account or account of any of its approved, only after obtaining prior approval. And among the most important items of the draft regulation will not be allowed to foreigners as a whole (qualified foreign institutions and residents and non-residents who invest through swap agreements), to own more than 10 per cent of the market value of the Saudi stock exchange. According to the analysis unit of economic reports in the newspaper ' economic ', the quota for foreigners according to the article above, some 202 billion riyals ($ 54 billion) in market value of listed shares amounting to 2.02 trillion rials ($ 540 billion), according to a close last Thursday. Foreigners may not collectively own more than 49 percent of any company listed on the stock exchange, and assuming the foreign ownership ratio in all listed companies will be theirs to 991 billion, but that is practically impossible because the shares available for trading for listed companies, less than 49% of the shares issued.
According to the draft regulation, would not allow any foreign investor directly (foreign financial institutions eligible), owns more than 5 percent in a listed company, and not exceed 20 per cent of aliens together in one company, equivalent to 5 per cent of the market of 101 billion riyals, while 20 percent to 405 billion riyals. Foreign financial institutions are eligible in accordance with the new regulations, which are banks, brokerage firms, insurance companies and funds, while the regulation required that the value of assets managed by foreign financial institution, which plans to enter the market 18.75 billion riyals (five billion dollars), the Commission has reduced to 11.25 billion riyals (three billion dollars), and that the financial institution has experience of not less than five years.
Turning to the text of the draft regulation concerning sanctions violations of foreigners, article 28 of chapter v of the draft foreign investment in the Saudi market to that of the authority concerning qualified foreign investors include: if it considers that one of the cases mentioned in paragraph (d) of this article has been or may be achieved in connection with a qualified foreign investor or any of its approved for body: ' Ask the foreign investor qualifications, provide written clarification, information or documents deemed necessary to verify the status of the request for the presence of a qualified foreign investor or his representative before the Commission to answer questions and explain any issues the Board finds it relevant '.
In addition to conducting any investigation it deems appropriate, and to take any action to verify any information provided by a qualified foreign investor, including through communication with foreign regulatory bodies, and the suspension of the registration of the foreign investor qualifications set period so as to check the status of the relationship, as well as for the unregistering qualified foreign investor, or withdraw approval of any of its approved, preventing qualified foreign investor from the investment of funds belonging to one or more clients approved in stock Included, exercise any other powers in accordance with the regulations '. Registration is suspended, canceled or prevent investment on behalf of clients, or withdraw approval of them, under subparagraphs (5) or (a-6) or (a-7) of this article shall be effective upon sending written notice to the Board that the foreign investor qualifications or relevant authorized person.
As for the right to publish the identity of any financial institution suspended registration or cancelled or withdrawn consent under this article. Include cases referred to in paragraph (a) of this rule as follows: ' not continue to meet the conditions and obligations and requirements set out in these rules either of a qualified foreign investor or any of its approved and qualified foreign investor does not start trading listed shares within 30 days from the date of registration, along with any insolvency of the foreign investor qualifications or any of its approved '.
Along with ' breaking foreign investor qualifications or any of its approved for any of the obligations set out in the order and its regulations and any other regulations in the Kingdom, and that the foreign investor qualifications for registration or approval of any of its clients based on false or misleading information, in addition to regulatory penalties or legal substance in any State on foreign investor qualifications or any of its approved, and any other case, the Board finds necessary to protect investors and maintain the functioning of the market In the Kingdom. The investor may not be cancelled or suspended registration purchase shares listed ', whether on his own account or for account of customers ' approved ' after cancellation or suspension, and that the investor has cancelled or suspended registration of disposal of any shares held in a deposit Center account or any of its approved ' after the deregistration or suspension without prior approval.
