Amendments to the Capital Market Law Regulation

CMA Obligates Issuers to Disclose the Initial Results  in 15 days

Mohammed Al  Abri: MSM Best GCC Stock Exchange in Prompt Disclosure

The Capital Market Authority has issued a circular to all issuers of securities  urging them to  comply with the new amendment to the Executive Regulation of the Capital Market Law which obligates the issuers to disclose initial audited and un-audited  quarterly and annual results forthwith preparation through the Information Centre of MSM in not more than 15 days from the end of the respective quarter.

CMA had issued Circular 5/2014 dated 29/5/2014 to the issuers  on the same matter which was optional, however, after publication of the new amendments in the Official Gazette the disclosure would be mandatory.

The new amendments resolved by the Board of Directors of CMA amended Articles 280 and 248 of the Executive Regulation of the Capital Market Law.

Article 280 provides “Issuer shall disclose the initial quarterly and  annual un-audited financial results immediately after preparation. In all cases disclosure shall be in not more than fifteen (15) days from the end of the quarter or the financial year as the case may be.”

Article 284 provides “Issuer shall disclose quarterly and annual audited and un-audited financial statements and initial results through the electronic transmission system of MSM in Arabic and English within the statutory time limits.”

On the amendments, Mohammed Said Al Abri, Director General of Issues and Disclosure said “ Reducing the time limit for disclosure of the issuers of securities represents added value to MSM and will boost the confidence of market participants as availability of prompt information helps in taking sound investment decision and eliminate rumors.”

 He added the review of disclosure requirements and reducing the term was made due to the existence of advanced accounting systems with the issuers of securities which allow speedy preparation of the financial statements hence  the move will make MSM one of the best GCC stock exchanges in disclosure of listed companies.

This will help in the provision of statements necessary for timely investment decision, investor protection through fairness, efficiency and transparency and preventing insider trading.

Al Abri added the information needed to be disclosed in fifteen days include total sales or revenues, sales costs, total expenses, net expected profits after deduction of tax and comparisons of the same with the same term of the previous year and the importance of indicating the results are initial and un-audited.

He added that CMA endeavors to enhance disclosure the transparency to provide for higher standards of confidence through quarterly statements and timely disclosure of material information on the issuers of securities.