Capital Market Authority (CMA)

Overview

Control Layer: Layer 1 | Import ID: reg-sa-nat-cma

The Capital Market Authority (CMA) is the independent regulatory authority for Saudi Arabia's capital markets, established by Royal Decree No. (M/30) of 2/6/1424H (31 July 2003). The CMA operates with full financial, legal, and administrative independence and maintains direct links to the Prime Minister's office, underscoring its elevated status in the kingdom's financial regulatory framework.

The CMA's core mandate encompasses:

• Developing and regulating the Saudi capital markets

• Overseeing the Tadawul exchange (Saudi Arabia's stock exchange)

• Protecting investor interests and market participants

• Ensuring orderly, transparent, and fair securities trading

• Creating an appropriate investment environment and promoting market confidence

The CMA is governed by five commissioners appointed by Royal Decree, with one commissioner designated as Chairman and another as Vice Chairman. The current Chairman is Mohammed bin Abdullah Elkuwaiz.

Basic Identity

Classification

Inclusion Justification

What This Entity Oversees

Regulatory Supervision

The CMA conducts ongoing supervision of:

• Authorized Persons (brokers, dealers, investment managers, custodians)

• Listed companies and securities issuers

• Stock exchange operations

• Depository and clearing operations

• Capital market intermediaries

Examination Authority

The CMA has authority to:

• Conduct regular and special examinations of market participants

• Request and review books, records, and documentation

• Interview officers and employees

• Assess compliance with regulations

• Identify deficiencies and risk areas

Compliance Requirements

Market participants must maintain:

• Adequate capital and liquidity standards

• Anti-money laundering (AML) and Know Your Customer (KYC) compliance

• Internal risk management controls

• Compliance monitoring systems

• Segregation of client assets (for brokers and custodians)

Core Protections

The CMA's investor protection mandate includes:

Disclosure and Transparency:

• Mandatory periodic financial reporting by listed companies

• Continuous disclosure of material events and changes

• Audited financial statements and governance disclosures

• Clear, accurate, and timely investor communications

Fraud and Manipulation Prevention:

• Monitoring for insider trading, market manipulation, and fraudulent schemes

• Enforcement against unauthorized trading and false representations

• Surveillance of market transactions and unusual trading activity

• Investigation and prosecution of capital market crimes

Fair Dealing Standards:

• Suitability requirements for broker recommendations

• Prohibition of misrepresentation and omission of material facts

• Conflict of interest disclosures

• Segregation of client assets

Licensing and Competence:

• Vetting and licensing of brokers, advisors, and dealers

• Ongoing competence requirements and training standards

• Financial stability requirements for authorized persons

• Restrictions on individuals with disciplinary histories

Information Resources

The CMA maintains public resources for investor education and awareness, available through its official website at cma.gov.sa/en/Awareness.

Regulatory Powers

The CMA possesses comprehensive enforcement authority under the Capital Market Law, including power to:

Administrative Penalties

• Issue warnings and cease-and-desist orders

• Suspend or revoke licenses and registrations

• Fine authorized persons and market participants

• Suspend trading privileges

• Order restitution and disgorgement of proceeds

Investigative Powers

• Subpoena witnesses and documents

• Conduct inspections of regulated entities

• Require production of books, records, and communications

• Investigate breaches of the Capital Market Law and CMA regulations

Disciplinary Authority

• Address violations of licensing conditions

• Penalize fraudulent, deceptive, or manipulative conduct

• Enforce disclosure and reporting requirements

• Sanction insider trading and market manipulation

• Address conflicts of interest and misuse of client information

Market Intervention

• Halt trading in securities or suspension of market participants

• Implement circuit breakers and trading halts

• Order disclosure of material information

• Impose trading restrictions on issuers or individuals

Regulatory Role and Function

Legal Foundation

Primary Statute

Capital Market Law - Royal Decree No. (M/30) of 31 July 2003 (2/6/1424H)

The Capital Market Law is the foundational legal instrument that:

• Establishes the Capital Market Authority as an independent regulator

• Defines the regulatory framework for all capital market activities

• Grants enforcement and rule-making powers to the CMA

• Sets objectives for investor protection and market development

• Authorizes the establishment of capital market institutions (exchanges, depositories)

Regulatory Authority

The CMA operates under binding legal authority with power to:

• Issue and enforce regulations implementing the Capital Market Law

• License and supervise market institutions and market participants

• Conduct investigations and examinations

• Impose administrative penalties and sanctions

• Develop the capital market infrastructure

The CMA's independence and direct reporting relationship to the Prime Minister ensure enforcement authority and regulatory credibility.

Licensing and Authorization Relevance

Regulatory Scope

The CMA's regulatory framework covers:

Market Infrastructure:

• Tadawul (Saudi Stock Exchange) - the sole authorized entity for securities trading

• Securities Depository Center Company (Edaa) - settlement and depository operations

• Clearing and settlement systems

• Stock market participants and authorized persons

Regulated Activities:

• Securities issuance and offerings (public offerings, private placements)

• Securities trading and market conduct

• Investment advisory services

• Securities brokerage and dealing

• Portfolio management

Listed Companies:

• Corporate governance requirements

• Financial disclosure and reporting standards

• Transparency and investor communication

• Related-party transaction controls

Capital Market Institutions Regulations

The CMA has issued comprehensive regulations governing:

• Capital Market Institutions Regulations - establishing licensing and operational requirements for brokers, dealers, fund managers, and custodians

• Market Conduct Rules - preventing fraud, manipulation, insider trading, and unfair dealing practices

• Listing Rules - standards for companies seeking public market admission

• Disclosure Requirements - periodic financial reporting and material event disclosure

Key Regulatory Objectives

Per the Capital Market Law:

1. Protect investors from fraudulent, deceptive, and manipulative practices

2. Ensure orderly, fair, and transparent market operations

3. Develop confidence in the capital market

4. Promote market growth and competitiveness

5. Enforce high standards of disclosure and corporate governance

Requires verification from official sources Information on CMA's regulatory approach to virtual assets, cryptocurrencies, and digital securities is not definitively confirmed through primary sources reviewed. The CMA's website does not prominently feature a dedicated virtual assets regulatory framework comparable to traditional securities regulation.

Known Considerations:

• Saudi Arabia has not yet formally regulated cryptocurrency or token issuances within the CMA's framework

• The CMA may coordinate with the Central Bank of Saudi Arabia (SAMA) on digital asset policy

• Special Purpose Acquisition Companies (SPACs) have been approved for trading on the Nomu parallel market, indicating the CMA's willingness to adapt the regulatory framework for new market structures

• Any distributed ledger technology (DLT) or blockchain-based securities would likely require CMA approval

Sources Needed: Direct inquiry to CMA for definitive guidance on digital assets, tokenization, and blockchain-based securities regulation.

Requires verification from official sources The CMA's specific regulatory approach and policies regarding fintech innovation, regulatory sandboxes, and digital finance are not fully documented in primary sources reviewed.

Indicators of Regulatory Openness:

• Approval of Special Purpose Acquisition Company (SPAC) frameworks on the Nomu parallel market, suggesting willingness to modernize market structures

• Integration of modern trading systems on Tadawul

• Emphasis on transparency and technology-enabled disclosure

Areas Requiring Clarification:

• Regulatory sandbox or innovation testing programs

• Guidelines for algorithmic trading and high-frequency trading

• Robo-advisor and automated investment management regulation

• API-based trading and execution services

• Fintech licensing pathways distinct from traditional broker-dealer frameworks

Source Needed: Contact CMA's regulatory affairs or innovation divisions for current fintech policy and approval frameworks.

Payments and Money Movement Relevance

The Saudi Arabia Capital Market Authority (CMA) has the following relevance to payments and money movement in Saudi Arabia:

Payment Systems Governed or Overseen

The Saudi Arabia Capital Market Authority (CMA) has the following relationship to payment infrastructure in Saudi Arabia:

This entity's role in payment systems is primarily regulatory and supervisory rather than operational. It does not directly operate national payment infrastructure but contributes to the regulatory framework governing payment activities in Saudi Arabia.

Relationship to Other Regulators

Regional and Global Engagement

The CMA participates in international securities regulatory coordination through:

International Organizations:

• Member of international securities regulatory forums and IOSCO (International Organization of Securities Commissions) [UNVERIFIED - confirmation needed]

• Coordination with regional GCC regulatory bodies and central banks

• Participation in cross-border capital market development initiatives

Cross-Border Cooperation

• Recognition of foreign securities listings and investors (where permitted under Saudi law)

• Information sharing with foreign regulators regarding violations and enforcement matters

• Coordination with SAMA (Saudi Central Bank) on capital flows and financial stability

• Alignment with Saudi Arabia's Vision 2030 capital market development goals

Requires verification from official sources Specific bilateral agreements with foreign securities regulators and memoranda of understanding (MOUs) are not enumerated in publicly available sources.

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Headquarters

Capital Market Authority

King Fahad Road

Riyadh 11642

Saudi Arabia

Phone: +966 11 205 3000

Leadership

• Chairman: Mohammed bin Abdullah Elkuwaiz

• Vice Chairman: Youssef Hamad Al-Bilihid

• Board Members:

• Khaled Abdulaziz Al-Homoud

• Abdulaziz Abdulmohsen Binhassan

• Dr. Murya Saad Habbash

Official Websites

• Primary: cma.gov.sa/en

• Alternative: cma.org.sa/en

Key Resources

• Contact Form: cma.gov.sa/en/ContactWithCMA

• Regulations & Rules: cma.gov.sa/en/RulesRegulations

• Authorized Persons Directory: cma.gov.sa/en/Market/AuthorisedPersons

• Awareness & Education: cma.gov.sa/en/Awareness

• National Platform: my.gov.sa/en/agencies/17579

Tadawul (Stock Exchange)

• Operator: Tadawul Company (Saudi Stock Exchange)

• Website: tadawul.com.sa

• Nomu Parallel Market: Secondary market for growth companies

Related Regulatory Authority

• SAMA (Saudi Central Bank): Coordinates with CMA on monetary policy, capital flows, and financial stability

• General Authority of Zakat and Income Tax (GAZT): Tax compliance for securities transactions

Notes on Naming and Language