The Capital Market Authority's (CMA) Board has given the green light to amendments aimed at enhancing the regulations governing the bankruptcy of capital market institutions. Effective upon publication, these amendments are designed to bolster the protection of clients' funds and assets, fostering participant confidence, stability, and growth in the capital market.
The approved changes outline two paths for capital market institutions in case of bankruptcy. For those handling clients' money, assets, or managing investment funds, CMA approval and an auditor's confirmation of no deficit are required before initiating bankruptcy procedures. For institutions without such responsibilities, a 30-day notice to the CMA, along with an auditor's confirmation, is necessary before filing a petition with the competent court.
The amendments grant the CMA authority to direct institutions to take necessary measures, in accordance with the Capital Market Law and the Bankruptcy Law, to protect clients' rights and facilitate the transfer of their funds and assets. The CMA's strategic plan aligns with the Kingdom Vision 2030, aiming to enhance investment efficiency, investor protection, and attractiveness to foreign and local investments. The draft amendments were subject to a 30-day public consultation period, demonstrating the CMA's commitment to transparency and inclusive decision-making.