Memorandum of Co-operation Between
Saudi Arabian Monetary Agency
And
The Capital Market Authority
SAMA and CMA signed a memorandum of cooperation aimed at developing a framework for cooperation to achieve a high degree of coordination between them and strengthen oversight of entities subject to their control, each according to its jurisdiction, thereby, leading to the development of the financial sector and enhancing its stability.
The memorandum has been signed by Governor the Saudi Arabian Monetary Agency, Dr. Fahad Abdullah Almubarak, on behalf of SAMA, and the Chairman of the Capital Market Authority Board, Chief Executive Dr Abdulrahman bin Abdulaziz Al-Twaijri, on behalf of CMA. The memo provides for coordination between SAMA and CMA in the areas of supervision and oversight, regulation of corporate governance, selection of accounting standards and risk management, regulation of securities offering and their settlement, merger, acquisition, control, ownership limits, and the exchange of information and data.
With regard to coordination in the supervision and control areas, the memo stipulates that the two parties shall coordinate before issuing or updating regulations, rules, instructions and guidance manuals of common interest and they shall coordinate with respect to any steps that should be taken to ensure the stability of the financial sector in the Kingdom.
As for corporate governance, the two parties shall coordinate concerning the regulation of corporate governance of stock-companies working in the banking and insurance sector and other sectors (whose supervision and control are entrusted to SAMA), and setting appropriate accounting standards for them. In addition, they shall coordinate with regard to the issuance of securities and the regulation of merger and acquisition, control and ownership limits of these companies.
In the framework of securities settlement, the memo also states that SAMA and CMA shall work on the development of appropriate mechanisms for the settlement of financial payments, as well as, the exchange of information and data on corporate activities that fall within the jurisdiction of either party.
The two parties agreed, in the framework of the memorandum, on the formation of a joint high level permanent committee to look into matters relating to the implementation of this memo. The committee shall hold its meetings on a regular basis and at the request of either party.
It is noteworthy that this agreement is a positive step for coordination between relevant government agencies in the financial sector in the Kingdom to ensure the development of the sector and increasing its efficiency and financial stability.