CMA Experience In Seeking Public Consultation for CG Regulations 1 Saudi CMA Drafting Experince on Public Counsultation
Stages of Drafting the Saudi Corporate Governance Regulations. The Consultation Experience What have We Gained? 2 Saudi CMA Drafting Experince on Public Counsultation
The Context • Who is developing CG? – CMA (Young organization, CML flexibility) – Is CG a totally new concept? (40 years old Company Law, Labor Law, other law) • Why CG? – Part CM development – Part of investor protection. • Saudi CG is meant for listed companies? 3 Saudi CMA Drafting Experince on Public Counsultation
Stages of Drafting the Saudi Corporate Governance Regulations 4 Saudi CMA Drafting Experince on Public Counsultation
Stages of Drafting the Saudi Corporate Governance Regulations Development Team formation by the CMA board on August 13, 2005. Participating in CG workshops and conferences. Reviewing & Studying: Governance principles enunciated by international organizations, including the OECD. The experiences of many regional and international countries including: Oman, Singapore, Malaysia, USA, United Kingdom. Best Saudi companies practices in the area of governance. Relevant rules & regulations in Saudi laws, particularly the Companies Law and Capital Market Law and its implementing regulations. 5 Saudi CMA Drafting Experince on Public Counsultation
Stages of Drafting the Saudi Corporate Governance Regulations CMA board approved the draft of CG regulations for consultation on July 2 nd, 2006. The draft of CG regulations was posted at CMA web site for public consultation & feedback immediately. Suggestion & responses could be sent by E-mail, fax, or surface mail. 6 Saudi CMA Drafting Experince on Public Counsultation
Stages of Drafting the Saudi Corporate Governance Regulations Meeting with a number of related parties: The Ministry of commerce and Industry, the National Committee of the Saudi joint stock companies, Council of Saudi Chambers of Commerce. The issuance of the CG Regulations by the CMA board on November 11 th, 2006. The issuance announcement and press release emphasized the contributions from the public. CMA explicitly expressed its appreciation and serious consideration to all received comments. 7 Saudi CMA Drafting Experince on Public Counsultation
The Consultation Experience 8 Saudi CMA Drafting Experince on Public Counsultation
The Consultation Experience We received high-quality observations. Both content and form of CG provisions have improved. Very wide interest for CG in the media and from the public. The Saudi Chapter of CFA translated the CG draft and sent it CFA experts. A very special interest appeared from The Committee of the National joint stock companies in the Saudi council of Chamber of Commerce. The committee toke the initiative to solicit observations on CG draft from the Saudi companies and forwarded them to CMA. 9 Saudi CMA Drafting Experince on Public Counsultation
The Consultation Experience More than 42 Saudi joint stock companies sent their observations directly to the CMA. During the consultation period Hawkama Institute (Dubai) in cooperation with Institute of International Finance (IIF) visited the Saudi CMA. They provided an assessment of corporate governance in the Gulf. Other contributing parties were: The Saudi Organization for Certified Public Accountants (SOCPA). The Saudi Economics Society. Faculty from Saudi university. Legal, financial offices, and brokerage companies. 10 Saudi CMA Drafting Experince on Public Counsultation
The Consultation Experience A lot of press articles and TV discussions forums raised many observations on the CG draft. CMA collected and considered all raised issues. Observations through E-mail constitute 60% of the total responses received. Some came from out of the Kingdom. Observations after the deadline were also considered till the date of issuance of the regulations. 11 Saudi CMA Drafting Experince on Public Counsultation
What have we gained? 12 Saudi CMA Drafting Experince on Public Counsultation
What have we gained? Consultation brings us closer to what we think the best CG practices that are relevant to the kingdom. Higher levels of awareness of CG in the public mind which should ease CG acceptance Getting the public involved in regulations development and hence acceptance. The feedback from local and international experts has been fruitful. 13 Saudi CMA Drafting Experince on Public Counsultation
Thank you for your attention Corporate Governance Team WWW. cma. org. sa 14 Saudi CMA Drafting Experince on Public Counsultation
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