By A E JAMES

Muscat: Oman’s market watchdog Capital Market Authority (CMA) has started taking stringent disciplinary action against companies that violate disclosure and transparency rules.

“CMA strives to ensure timely, factual, transparent and complete disclosure of the material information by listed entities. The disclosure quality should be in line with the standards stipulated by CMA. Investors have the legitimate right to know any material information and any financial impact thereof at the same time when such information becomes known to the people privy to such information,” Mohammed Al Abri, acting vice-president at the Capital Market Authority, told the Times of Oman.

Compliance

“The diligent compliance by listed entities with CMA’s disclosure requirements is commendable although CMA had to take an unpleasant decision to direct suspension of the trading in few cases in the recent past to protect investors. After such suspension, trading is allowed to resume only after a complete disclosure as per regulatory requirements is made,” added Al Abri.

Of late, trading in several companies, including few blue chip stocks, were suspended briefly on lack of complete information while disclosing board decisions and information related to contracts.

The penalty for incomplete disclosure include suspension of trading until full disclosure is made, while insider trading will attract a fine twice the value of profit generated from such a trade. Also, those who try to mislead investors with false news will attract a fine of up to OMR100,000.

“There have been suggestions from market players regarding complete disclosure of information to protect the interest of investors,” said Khushboo Badlani, financial analyst, Al Maha Financial Services.

She added that CMA and the Muscat Securities Market (MSM) are strictly practicing these policies now, which is in the best interest of the market.

“The disclosure guidelines of the Oman bourse are much more prudent than some of the regional markets,” added Badlani.

“MSM was the first regional bourse that introduced disclosure of financial results on a quarterly basis. They have done a pretty good job to make the local bourse at par with international standards,” said another market analyst on the condition of anonymity.

The investors should know whether the material information has a positive or negative impact on the balance sheet of the company.

Also, the information should be equally available to everybody.

After a series of disciplinary actions against companies, especially suspension of trading, the managements are more careful while disclosing information. As many as 135 companies and bonds are listed on the Muscat bourse.

© Times of Oman 2017