The Capital Market Authority (CMA) has reached out to stakeholders involved in the capital market to review and comment on the proposed changes to the Implementing Regulation of the Companies Law for Listed Joint Stock Companies (the Draft). Interested parties are invited to participate in a public consultation period that lasts for 30 days, concluding on July 6, 2024.
The initiative behind the Draft is to refine the rules governing the repurchase or disposal of shares by publicly traded firms. The goal is to infuse more adaptability into these transactions and enhance their execution. This adjustment is expected to ease the constraints currently in place, fostering a more dynamic investment environment within the Saudi capital market that aligns with international standards.
The Draft proposes to decouple the number of shares a company can transact in a single day from the previously approved quantity, instead setting a cap where buybacks or sales on any given day should not surpass 25% of the company’s average daily trading volume, calculated from the preceding five trading sessions.
Current regulations dictate the quantities of shares that a listed corporation is authorized to buy or sell, based on the decisions made by extraordinary general assemblies or the board of directors. These buybacks or sales must be executed within 12 months from the assembly’s resolution.
The Draft is a part of CMA’s broader strategy to enhance the capital market’s framework and regulate trading activities, particularly concerning the purchase or sale of treasury shares by listed entities.
For those interested in providing feedback, the CMA has made provisions for comments to be submitted through various channels, including the ‘Istitlaa’ Public Consultation Platform or directly via email.