Saudi bans execs from trading before results

Three case of market manipulation have already been reported this year in Saudi Arabia. (Getty Images)

Saudi Arabia's bourse regulator said on Sunday it would ban board members and senior executives from trading in the shares of their companies in the run up to earnings reports.

For executives of companies reporting for the three months to September 30, the ban takes effect on September 16 and runs until the results are announced, the Capital Market Authority (CMA) said in a statement.

The ban starts on October 20 for firms reporting for the three months ending October 31, and October 28 for those with a quarter ending November 10.

Saudi Arabia is trying attract more institutional investment into the largest Arab stock market, which is dominated by retail investors and restricts foreign capital.

Shares of Saudi banks and insurers rallied last week after the cabinet ordered the regulator to remove constraints on investment in financial services stocks from five other Gulf Arab oil producers.

The regulator is cracking down on abuses, and in June fined two traders and two investors in the third case of market manipulation to reported in 2007.

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READERS' COMMENTS

SAUDI BAN ON EXECS FROM TRADING
Posted by Buddhadeb Mookerjee, Dubai, UAE on Sunday 2 September 2007 at 16:00 UAE time

This is a very welcome move directed towards elimination of insider trading in company shares. If the policy is fully implemented in word and spirit, the stock market operations in Saudi Arabia would enjoy a high degree of transparency.

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