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Loading ... Loading ... Loading ...| 30 Jan 2012 |
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The move comes as the Kingdom weighs opening up its stock market to direct investments by foreigners.
The Tadawul closed slightly higher Sunday. The index rose 0.27 percent to 6,554.77 points.
The Capital Market Authority (CMA) said it had signed a cooperation agreement with the SAMA to coordinate supervision of the financial sector in order to improve its stability.
As per the agreement, the two entities will coordinate in the supervision of corporate governance, risk management measures, initial public offerings (IPOs), sukuk issuance and merger and acquisition regulations as well as the exchange of information.
CMA Chairman and CEO Abdulrahman Al-Tuwaijri and SAMA Gov. Fahd Al-Mubarak signed the memorandum of understanding (MoC).
According to the MoC, CMA and SAMA will cooperate in several areas such as supervision and surveillance, regulating corporate governance and deciding accounting standards and risk management, organizing securities offering, securities settlement, organizing the merger and acquisition of companies, control and ownership boundaries, and exchanging information and data.
In the area of supervision and surveillance, the MoC specifies that both parties shall cooperate before issuing or updating rules and regulations or manuals of common interest.
With regard to corporate governance, both parties will cooperate in the area of organizing corporate governance for companies whose shares are publicly listed and work in the banking sector, insurance sector, and other sectors supervised by SAMA.
They will also work together to develop the appropriate accounting standards for these companies.
The press release said CMA and SAMA will cooperate in the area of issuing securities, organizing merger and acquisition as well as control and ownership boundaries for these companies.
In the area of settlement of securities, the MoC specified that SAMA and CMA would work together to develop the appropriate mechanisms to settle financial payments.
They will also cooperate in exchanging information and data related to companies each of them supervises according to their activities.
Both parties also agreed to establish a high level standing committee which will have the responsibility of overseeing the implementation of the points agreed upon in the MoC.
The committee will meet regularly or at the request of any of the two parties to discuss relevant issues.
The MoC is considered to be a positive step of coordination between financial governmental bodies in Saudi Arabia to develop the financial sector and ensure its efficiency and prosperity.
© Arab News 2012
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