PR85660

RIYADH, Saudi Arabia, Sept. 18, 2020 /PRNewswire=KYODO JBN/ --

The Capital Market Authority (CMA) Board approved the "Instructions on Issuing

Depositary Receipts Out of the Kingdom" which aim to set out the regulatory

framework for the issuance of depository receipts out of the Kingdom of Saudi

Arabia for shares issued in the Kingdom and listed in the Saudi Stock Exchange;

or shares issued in the Kingdom and its issuer has made the necessary

arrangements for listing them in the Exchange. These instructions come for the

purpose of opening the Saudi financial market to foreign markets and

contributing to build an advanced global financial market, in addition to

providing additional financing methods for Saudi issuers whose shares are

listed in the Exchange, or who have made the necessary arrangements for listing

their shares in the Exchange.

These instructions enable the company (the issuer) to allocate a percentage of

the company's shares for which depository receipts are issued, where such

depository receipts will be offered and listed in a foreign financial market.

Listed or non-listed Companies on emerging markets typically use depository

receipts for the purpose of offering and listing in advanced foreign markets,

as depository receipts contribute to increasing the efficiency of pricing the

issuer's securities between the local and foreign markets. It is also one of

the flexible methods for the issuer to offer securities in the currency of the

foreign market.

In this regard, Mr. Bader Balghonaim, the CMA Deputy for Legal Affairs and

Enforcement clarified that one of the key objectives of these instructions is

to set out the regulatory framework for the issuance of depository receipts out

the kingdom for shares of companies listed on the Saudi Stock Exchange, or

shares for which necessary arrangements for listing in the Exchange have been

made, which enables diversifying the investors base in the Saudi Stock Exchange

to include foreign investors in those depository receipts out the kingdom,

taking into consideration international best practices and standards.

The CMA studied all views and comments received during the public consultation,

and among the views that were taken into consideration is clarifying the conditions

to be met in order to enable the holder of depositary receipts, if such holder is among

the categories of investors allowed to invest in the listed shares in the Kingdom,

to cancel such receipts and become the holder of the corresponding shares.

Moreover, the CMA has prepared the instruction in line with the its strategic

objectives and responsibilities in further developing the financial market; it

also comes in line with the CMA's strategic initiative "Financial Leadership

Program" to contribute in achieving the Saudi Vision 2030.

The Instructions can be viewed via the following link:

Instructions on Issuing Depositary Receipts Out of the Kingdom

[https://cma.org.sa/en/RulesRegulations/Regulations/Documents/INSTRUCTIONS_ON

ISSUING_DEPOSITARY_RECEIPTS_OUT_OF_THE_KINGDOM_en.pdf ]

Contact:

Capital Market Authority

Communication & Investor Protection Division

+966114906861

+966544822226

media@cma.org.sa

www.cma.org.sa

About CMA:

The Capital Market Authority (CMA) is the supervisory and administrative

authority responsible for regulating and developing the financial market by

issuing the laws, regulations and instructions necessary to implement the rules

of the Capital Market Law, in order to provide the appropriate climate for

achieving confidence, fairness and efficiency for issuance of securities and

full disclosure of joint stock companies and protect investors from the illegal

acts in the stock market.

For more information about CMA, please visit the official website:

www.cma.org.sa .

Source: Capital Market Authority (CMA)