Jan 30 2012 |
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Bigger role for SAMA in financial supervision
JEDDAH -- Saudi Arabian Monetary Agency ( SAMA ) will play a bigger role in the supervision of the country's financial sector as the Kingdom weighs opening up its stock market to direct investments by foreigners.The Capital Market Authority (CMA) said Sunday that it had signed a cooperation agreement with SAMA to coordinate supervision of the financial sector in order to improve its stability.
" Saudi Arabia's Central Bank signed a cooperation agreement with the Capital Market Authority yesterday (Saturday) which aims to set a framework for greater cooperation between the two and to improve supervision over the sectors that they oversee," the CMA said.
The agreement signed by Dr. Abdulrahman Al-Tuwaijri, CMA Chairman & CEO and Dr. Fahd Al-Mubarak, SAMA Governor, stated that the two entities would coordinate in the supervision of merger and acquisition regulations as well as the exchange of information.
Currently companies need only CMA approval for mergers and capital increases.
CMA also stated that the two would coordinate before issuing or renewing regulations or taking any steps to ensure the stability of the Saudi financial sector.
In the area of settlement of securities, the agreement specified that SAMA and CMA shall work together to develop the appropriate mechanisms to settle financial payments. Both parties also agreed to establish a high-level standing committee which would have the responsibility of overseeing the implementation of the points agreed upon. The committee will meet regularly or at the request of any of the two parties to discuss relevant issues.
Saudi Arabia is in the process of finalizing plans for foreigners to invest directly in its stock market, the biggest in the region.
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