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The Capital Market Authority's (CMA) board approved today, Jan. 5, the amended prudential rules, which will be effective as of April 1, 2023, according to a statement.
The amended rules aim to enhance the stability of the capital market institutions to further boost the confidence of market participants and create an attractive investment environment to support national economic growth, the statement added.
Furthermore, amending the prudential rules comes as part of the CMA's keenness, since its inception, on continuously regulating and developing entities under its authority that carry out securities business, enhancing the control procedures and their prudential level.
This is 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.
The main elements of the amended rules are updating the prudential requirements for carrying out any of the securities business, including those related to credit, market, operational and concentration risks.
They also include updating the methodology used to calculate the minimum limit of capital adequacy. This is besides facilitating the prudential requirements for investment management, arrangement and advisory work to be based on expenses, which is in line with the nature of such activities.
The existing prudential rules, issued under the CMA’s board decision in 2012, will remain valid until April 1, when the amended prudential rules come into effect.
Accordingly, capital market institutions will stay exempted from the provisions of Articles 66, 68 and 69, as well as the requirement of preparing a report by the external auditor on the computations validity of the minimum capital stipulated in paragraph (b) of Article (74) of the prudential rules, issued by the CMA's board under its 2012 decision.
Last September, the CMA's board decided to publish the draft amended prudential rules for public consultation for a period of 60 calendar days, ended on Oct. 30, 2022, according to Argaam's data.
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