Al Salmi
The Capital Market Authority announced resumption of general meetings of joint public stock companies and investment fund via electronic portal of Muscat Clearing and Depository Company (MCDC) after being suspended in mid March based on the instructions of the Supreme Committee tasked with dealing with the developments of the breakout of Coronavirus (COVID-19).
The decision to resume convening of general meetings was made after furnishing an environment that enables all the listed companies and funds to convene their meeting through electronic means.
The rules for convening the general meetings of the issuers of securities via electronic means were issued vide the decision of HE the Chairman of the Capital Market Authority No. E/25/2020 and the completion of the electronic portal executed by MCDC in collaboration with Omantel and Bolckchain Solutions and Services as local secure portal to facilitate convening general meetings.
HE Sheikh Abdullah Salim Al Salmi, Executive President of the CMA said “ We appreciate the cooperation and coordination between the CMA as the regulator and supervisor of the capital market and MCDC which collaborated with Omantel and Bolckchain Solutions and Services to develop a local and secure solutions developed according to local requirements to enable the companies and funds to convene their annual general meetings in light of the exceptional circumstance due to the epidemic COVID-19. The issuance of the rules enables the shareholders and unit-holders an opportunity to participate in the general meetings without the need to physically attending but via electronic means and take part in the consideration and voting on the agenda which will ensure wider participation by investors in the general meetings not only in the current circumstances but at all times in the future as shareholders will be able to attend physically or through the system, and the portal administered by MCDC will be the secure system for convening general meetings and prepared according to the legal and procedural requirements for such meetings, and all proceedings, voting and counting the votes in the election of the directors will be through the portal further to the features of the portal such as security, confidentiality of information and was prepared locally by Omanis in accordance with the applicable laws and regulations and technical needs for convening such meetings. The electronic portal allows shareholders and unit-holders to vote on any item in the agenda three days before the date appointed for the general meeting. The portal will keep the voting confidential and will not be revealed except during voting on the items in the day of the meeting. The system will be linked to the clearing system to ensure the vote will be of the security on the time of the general meeting which means a person who votes and then sells the security will not be entitled to such vote.
HE said the issuance of the rules comes at the time of breakout of COVID-19 and the precautionary measures which affected the activities of individuals and institutions worldwide and impacted the timings of general meetings of the issuers of securities whether companies or funds and CMA suspended the general meetings as part of the national efforts of the Supreme Committee tasked with dealing with the Coronavirus COVID-19to curb the spread in the local community. The meetings were supposed to be held within 90 days from the end of the financial year which for most companies ends in December. Hence, there was need to respond and create alternatives through electronic means to ensure shareholders exercising their rights in discussing the performance of the company and their rights to stand as candidates for the boards of directors and vote on the proposed resolutions as owners of the company or fund.
HE confirmed that the rules for convening general meetings of public joint stock companies and investment funds via electronic means is a breakthrough in the process of developing the Omani capital market adding that this move was in the plans of the CMA to automate the sector and avail the technology revolution in this respect and that the quick response in such circumstances was in line with the Commercial Companies Law promulgated by Royal Decree No. 18/2019 with regard to resilience and facilitating use of technology in the businesses of the companies at all levels which is a requirement in the business and finance arena to ease the processes and bridge the distances to attract foreign and domestic capital to the MSM to create economic entities that achieve the Oman 2040 vision to boost the contribution of the private sector in the national economy.
HE the Executive President of the CMA said procedures issued under Circular No. 8/2020 are detailed guide for the companies and funds on how to convene the meetings adding that CMA made a temporary decision to speed up convening the suspended general meetings by publishing their agenda 10 days before the meeting instead of 15 days.
HE pointed out that the rules and procedures allow the shareholder to exercise his legal right to attend and vote in the general meeting either by attending personally to the venue of the meeting or via electronic means as well as regulating the candidacy procedures for the membership of the boards of directors and voting procedures. The rules also specified the mechanism of proving the quorum of the general meeting by three ways, by attending personally (when the circumstance allows) or via the link of the general meeting’s page on the day of the meeting and the third way is prior voting on the agenda. He added that shareholders and unit-holders cannot attend by more than one method and that the system allows the juristic person only to authorize another person to attend the meeting and vote on their behalf. The decision not to allow proxies for individuals was made to encourage their attendance and participation in the discussion to take part in the decision making process as the portal eliminated an obstacle preventing their attendance for being residing away from the venue of the meeting or inconvenient time and venue of the general meeting.
HE the Executive President called on all the shareholders and unit-holders to update their details especially their telephone numbers through MCDC website or alternative communication methods provided by MCDC as the entity that keeps shareholders and unit-holders details to ensure success of the process.
According to the approved rules for convening general meetings the issuer of the security shall coordinate with MCDC forthwith approving the agenda by the CMA to send the agenda to the shareholders and the process of the general meeting in accordance with the laws and regulations.
With regard to candidacy to the boards of directors the rules explain that the candidacy form shall be submitted to the company or fund after filling all the details five (5) days prior to the date appointed for the general meeting for election of members of the board or fund management. The company or fund shall disclose the candidates who are eligible under the form approved by the legal advisor and their profile on the MSM website three (3) days before the meeting and the issuer of the security shall ensure entry of the details of eligible candidates by the legal advisor to the general meetings system in collaboration with MCDC.
The rule stipulates in Clause (12) that the period for voting shall not exceed five (5) minutes except the election of the members of the board of directors which is ten (10) minutes and the chairman of the meeting will announce commencement and end of voting.
CMA also intends to host a webinar at which CMA and MCD officials would give a brief about the new system and hold interactions with the representatives of Public Joint Stock Companies, Legal Advisors and Auditors. Interested person may access the details of the rules and procedures on the CMA’s website www.cma.gov.om