Saudi authorities crack-down on market abuse

By James Barnes

27 September 2012 at 11:42 BST

Capital markets regulators in Saudi Arabia have fired a warning shot at institutions undertaking securities business in the country despite not being authorised or exempt.

Saudi Arabia: regulators get the hump

A briefing note from the local office of London-based magic circle law firm Clifford Chance quotes the Saudi Arabian Capital Market Authority (CMA) as saying the warning ‘reflects the legal position provided by the laws and regulations governing the securities industry’ in the jurisdiction.


The on-shore regulatory model will make sure that an entity carrying out any securities activity must be licensed by the CMA or be exempt, as defined in the securities business regulations.
Under article 6 of those rules, a breach of the requirement may result in a fine or even imprisonment. Any agreement or contract made in relation to a security transaction conducted by an unauthorised person will also become void.
The rule tightening is accompanied by a CMA call to Saudi securities investors to deal only with authorised persons. The authority has also urged investors to report any unauthorised securities business.


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