Abdullah bin Salim al Salmi, Executive President at the Financial Services Authority (FSA), affirmed that the regulatory provisions contained in the Executive Regulation of the Securities Law provide further detail on the regulatory rules set out in the Law promulgated by Royal Decree No. 46/2022. These provisions aim to build a more efficient and competitive market that contributes to achieving the goals of Oman Vision 2040.
He explained that the Securities Law established a legal framework designed to facilitate the optimal economic utilisation of national wealth and assets, while providing protection and an appropriate investment environment for market participants. This is achieved by enabling capital market institutions and entities operating in the securities sector to fulfil their role in serving, supporting and developing the national economy through suitable financing mechanisms and alternatives that mobilise savings and channel them towards financing existing productive and service projects, as well as new projects within the national economy, thereby contributing to the creation of employment opportunities for Omani youth.
Al Salmi said that the Regulation places considerable emphasis on providing alternative and innovative financing options, while offering sufficient flexibility to accommodate the needs of Oman’s economic growth amid rapid changes driven by financial technology and developments in regional and international markets. This is expected to support the attraction of local and foreign capital through the capital market sector, support economic activities, and strengthen investor confidence by reinforcing the principles of fairness, integrity and transparency.
His remarks came during a press conference organised by the Financial Services Authority (FSA) following the issuance of the Executive Regulation of the Securities Law under Decision No. (E/11/2026). The conference aimed to highlight the Regulation’s key components, features and regulatory goals, as well as prepare entities subject to its provisions to understand the new regulatory requirements and their implementation mechanisms during the six-month transitional period, which commenced on July 27, 2026.
Enhancing investor protection
With regard to the protection of market participants, Al Salmi said that the Regulation strengthens the rules governing the segregation of clients’ funds and investments from the funds and assets of entities operating in the securities sector, and protects them from the effects of bankruptcy and liquidation. It also requires the submission of supervisory reports that enable the FSA to verify the proper segregation of clients’ funds and assets. He explained that this update allows the Authority to continuously verify compliance with segregation requirements, rather than relying solely on the existence of a legal requirement without periodic reports demonstrating its implementation.
He added that the legislator has required entities licensed to conduct securities portfolio management activities to implement a range of measures aimed at strengthening investor protection and ensuring that the interests of clients remain a priority. These include preventing the use or direction of a portfolio to serve the interests of the licensed entity, or financing a client for purposes outside the agreed investment objective. In this context, the Regulation specifies the portfolio manager’s obligations towards investors, including adherence to the agreed investment objectives and policy, and refraining from providing inaccurate information intended to influence investors into making decisions that serve the interests of the licensed entity. The entity is also required to provide periodic statements on the performance of the investment portfolio.
Investment banking activities
Given the central role of investment banks in developing the capital market, Al Salmi emphasised the importance of restructuring institutions operating in the securities sector to enable them to perform their intended role in developing Oman’s capital market and contributing to the achievement of the targeted economic objectives. He also highlighted the importance of creating a highly efficient and competitive environment with fair requirements applicable to all entities operating in the sector.
In this regard, the Regulation introduced investment banking as one of the activities undertaken by entities operating in the securities sector, with the aim of enabling these institutions to perform their intended role more effectively. This is expected to encourage them to develop innovative financing instruments and savings products that help match appropriate financing solutions with the nature and duration of projects, while supporting the broader development of the capital market sector.
Accordingly, the regulatory approach provides for independent entities that offer services to those seeking financing through the capital market, using available products and instruments while also developing new mechanisms and solutions. The Regulation therefore separates investment banking and other capital market activities from other financial activities and grants banking institutions currently providing such services a three-year period to regularise their status. At the same time, the Regulation allows banks to combine their licensed commercial banking activities with custody and trust services, in addition to providing underwriting services.
Al Salmi said that the development of the capital market requires effective institutions capable of carrying out investment banking activities, supporting market growth, enhancing its efficiency, and providing appropriate financing solutions and alternatives. He noted that this regulatory step is important as it strengthens the institutional and operational separation between banking activities and securities-related investment activities, reduces conflicts of interest and the transmission of risks, and provides greater clarity regarding the regulatory and supervisory responsibilities of the Financial Services Authority.
The Regulation allows entities licensed to conduct investment banking activities to provide a number of securities-related services, including investment management, product structuring, securities portfolio management, research and advisory services relating to investment in listed securities, and issue management. It also permits investment banks to act as underwriters for issuances approved by the FSA.
Al Salmi noted that the Regulation expands the range of collective investment funds by regulating eleven types of funds, while also allowing the FSA Board of Directors to license additional types. This expansion reflects the role of investment funds as a key platform expected to support the development of Oman’s capital market by generating sustainable demand for a broad range of financial instruments. As the fund sector grows, more capital becomes available in search of investment opportunities, encouraging projects to turn to the capital market for financing through shares, sukuk, bonds and other securities and financial products. This, in turn, supports issuance and listing activity and contributes to greater market depth and efficiency, while also providing a wider range of investment options for retail investors.
The types of funds provided for under the Regulation include mutual funds, liquidity funds, real estate funds, debt instrument funds, holding funds, index funds, private equity funds, endowment funds, green funds, sustainable funds and venture capital funds investing in start-ups and high-growth projects. Together, these funds provide additional mechanisms that facilitate the economic utilisation of national wealth and assets and broaden the range of investment products available.
Risk-based supervision
In discussing the key features of the Regulation, the Executive President affirmed that it includes provisions that strengthen a forward-looking, risk-based supervisory approach. These include capital adequacy reports and risk management plans for licensed entities, as well as business continuity plans and other regulatory requirements. The Regulation identifies the regulatory objectives and operational risks that institutions subject to its provisions are expected to address, while enabling them to take the necessary measures to achieve those objectives and mitigate risks that could affect safe and sound operations and the protection of relevant stakeholders.
Prohibits wash trading
The Regulation also includes clear provisions to address practices that may distort supply and demand on the exchange. It prohibits wash trading, transactions that do not result in a genuine change of ownership, orders entered without an intention to execute them, and artificial influence on opening or closing prices. It also prohibits raising the price of a security to induce others to purchase it, or lowering its price to encourage them to sell. Brokerage firms are also prohibited from exploiting client orders or engaging in front-running for their own benefit.
- Wash trading is an illegal form of market manipulation where a trader simultaneously buys and sells the exact same asset to fake high trading volume. It creates false market signals without the trader taking any real market risk.
The Regulation further strengthens disclosure, governance and compliance requirements and links supervision more closely to the continuous assessment of risks. It also regulates transactions that may give rise to conflicts of interest or involve the use of undisclosed information, thereby supporting integrity, transparency and equal access to information among investors.
Encouraging Fin-Tech innovation
As part of efforts to encourage innovation in financial technology across the non-banking financial sectors, Al Salmi noted that the Regulation introduces, through the regulatory sandbox, an accelerated pathway for such technologies, complementing the temporary licensing framework provided under the FSA Law issued pursuant to Royal Decree No. 20/2024.
He explained that the Regulation seeks to provide an appropriate legal environment to stimulate market innovation by allowing the FSA to license services and activities related to modern financial technologies and innovative financial instruments for which no specific legislation currently exists. He added that this step is expected to support the National Digital Economy Programme and the National Fin-Tech Strategy, while helping attract investment, particularly in financial technologies related to securities activities.
This will enable the sector to keep pace with technological developments while maintaining market integrity and stability and strengthening the protection of market participants.
The press conference concluded with a panel discussion that provided attendees with an opportunity to raise questions and discuss matters relating to the implementation of the Regulation, contributing to a better understanding of the new requirements and readiness for their application.
It is worth noting that the period granted to entities subject to the Executive Regulation of the Securities Law to regularise their status will end at the close of business on Wednesday, 27 January 2027. Banking institutions licensed to conduct activities of entities operating in the securities sector have been granted a maximum period of three years to regularise their status.
The conference also highlighted the key changes introduced by the new Regulation, which account for approximately 37 per cent of its overall provisions through either newly introduced or amended requirements. These structural updates broaden the capital market beyond a trading platform into an integrated ecosystem focused on market liquidity management and enhanced market access through a range of activities, including asset management, investment banking, market making, product structuring, credit rating and multiple categories of collective investment funds.
The Regulation also establishes a more detailed regulatory framework for capital market institutions as entities licensed by the FSA. These frameworks cover capital adequacy, governance, technical and operational systems, business continuity and risk management, in addition to periodic financial and operational reporting. Collectively, these requirements strengthen the FSA’s ability to maintain continuous oversight and intervene at an early stage when indicators emerge that could affect the soundness of an institution or financial stability.
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