Saudi Arabia's central bank eyes bigger role

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Saudi Arabia's central bank will play a bigger role in the supervision of the country's financial sector as the kingdom weighs opening up its stock market to direct investments by foreigners.

The country's Capital Market Authority (CMA) said on Sunday that it had signed a cooperation agreement with the central bank or Saudi Arabian Monetary Agency (SAMA) to coordinate supervision of the financial sector in order to improve its stability.

As per the agreement, the two entities will coordinate in the supervision of corporate governance, risk management measures, initial public offerings (IPOs), sukuk issuance and merger and acquisition regulations as well as the exchange of information.

Currently companies need only CMA approval for mergers and capital increases.

"It's been to a degree anticipated... From the market perspective it makes sense to have streamlining and making sure any inconsistencies are eliminated ahead of time rather than after the fact," said National Commercial Bank chief economist Jarmo Kotilaine.

"Given the stage of development in the Saudi market, it makes sense to have a system whereby the regulators compare notes on an ongoing basis and coordinate their activities," he said.

CMA also stated that the two bodies would coordinate before issuing or renewing regulations or taking any steps to ensure the stability of the Saudi financial sector.

Saudi Arabia is in the process of finalising plans for foreigners to invest directly in its stock market, the biggest in the region.

Last week the CMA amended article 14 of its listing rules, allowing foreign companies to list securities on the kingdom's bourse, taking the kingdom a step closer to direct ownership for overseas investors.

In December Saudi King Abdullah appointed a new central bank governor, Fahd bin Abdullah al-Mubarak, replacing Muhammad al-Jasser.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Capital plans: how Qatar's banks are shaping up

Capital plans: how Qatar's banks are shaping up

Ahli Bank chief executive Salah Murad says that despite competition...

The spectacular rise and fall of Arabtec

The spectacular rise and fall of Arabtec

The ups and downs of Dubai most heavily traded stock teaches...

1
MidEast investors eye $180bn overseas spending

MidEast investors eye $180bn overseas spending

Arab institutional investors have been buying up swathes of ...

Most Discussed
  • 6
    Revealed: average Dubai apartment, villa price tags

    The villa we rent in a prime area has been on the market for 6 months. Not one buyer has asked to look. Its all very well talking about average prices... more

    Wednesday, 30 July 2014 2:48 PM - chalky6766
  • 6
    What is the best credit card for Skywards miles?

    It's often pointless amassing loads of airline frequent flyer miles, including Skywards, as most airlines offer so few seats for redemption purposes. more

    Thursday, 24 July 2014 1:10 PM - smith
  • 4
    Akbar Al Baker’s double standards?

    In this part of the world, once a person is appointed to a high profile job, he thinks that superior knowledge in every technology, business process and... more

    Wednesday, 30 July 2014 4:30 PM - M. A. Hassan