(MENAFN - Arab News) The Capital Market Authority (CMA) has issued a resolution to gradually apply corporate governance standards and requirements on Authorized Persons from the beginning of this year. This is part of CMA's efforts to raise the quality, transparency and disclosure levels in the securities business sector in order to create a suitable investing environment.
CMA chairman and CEO Abdulrahman Al-Tuwaijri confirmed that CMA is seriously working toward establishing the best practices in corporate governance as well as raising the level of disclosure and transparency in all companies in the Saudi capital market whether they were listed companies or licensed Authorized Persons. Corporate governance is considered one of the important mechanisms to measure the market's efficiency in order to develop it and protect investors from illegal practices.
Al-Tuwaijri also explained that applying the governance standards and requirements would enhance the supervisory procedures, raise the level of institutional transparency and disclosure and support the legal and regulatory framework for those participating in the capital market.
This decision completes CMA's gradual binding of the corporate governance regulations on authorized persons in addition to listed companies in the market. It is worth mentioning that the CMA has completed the implementation of the mandatory articles of the corporate governance regulations on all listed companies in the market.
CMA has directed Authorized Persons to set up the necessary governance infrastructure that would include putting in place the necessary systems, policies and procedures involved. In addition, Authorized Persons are required to develop governance policies and procedures to monitor and supervise their effectiveness and to modify them, if and when needed. Examples of corporate governance measures being implemented by authorized persons include the restructuring of their board of directors to include independent members in order to increase its effectiveness, issuance of an annual report for the past fiscal year, and formation of special committees such as audit, nomination and remuneration committees.