Muscat: Sultan Salim al Habsi, Minister of Finance and Chairman of the Board of Directors of the Capital Market Authority issued a decision approving the Regulation for Public Joint Stock Companies which covers all regulatory aspects related to public joint-stock companies focusing on providing the legislative framework for all their operations and activities. The decision states the regulation shall have effect on the day following its publication in the Official Gazette except the provisions related to the appointment of the internal auditors and legal advisors which will be effected after six months.
The issuance of the regulation was based on the provisions of the Commercial Companies Law enacted by Royal Decree No. 18/2019 to achieve legislative adequacy and readiness that would enhance the confidence of investors in the Omani capital market and make it a sustainable engine of economic growth and wealth creation.
On the importance of the regulations for the listed companies, Abdullah Salim al Salmi, Executive President of the Capital Market Authority said the issuance of the regulation coincides with the comprehensive structural review of the legislative framework of the Omani capital market after more than 30 years to configure it to be a key financing tool to achieve the national priorities of 2040 Oman Vision including stimulating the private sector and activating the national economy.
He added that CMA, to improve the investment environment and encourage the initiatives aimed at enhancing the role of the private sector in sustainable development, preparing the regulations taking into account easing the processes and limiting its role to supervision and follow up and to allow the companies the freedom of implementing their plans and strategies within a clear legislative framework ensuring, at the same time, transparency and disclosure to furnish safety and protection to the company, its shareholders and investors in general.
Al Salmi said the issuance of the regulation was in several milestones the key was the community participation and opinions of the concerned on the draft regulation and then all the comments, remarks, and proposals were considered adding that the regulation is flexible and permits the legislator to issue the forms according to the requirements of each phase.
Al Salmi said the regulations embraced a number of provisions and rules including the rules for the election of directors of public joint-stock companies and their responsibilities and the key change was that candidates will only be natural persons for the stability of the boards of directors and to limit the changes in the composition of the board. Also, the limit for annual remuneration of directors has been increased to RO 300,000 in accordance with specific rules.
The regulation comprises 12 chapters on the establishment of the public joint-stock company, issuance of shares in the public offering, mergers, and conversion of companies, terms and conditions for transformation into a public company or the public company into another form, company management, and general meetings.
The regulation states in Chapter 9 that the company shall conduct an internal audit either through an independent in-house unit or engage an audit firm accredited by the CMA. Also, the regulations required the companies to have a legal advisor either a whole-time employee with adequate qualifications and experience or engage a licensed law firm registered with the CMA.
Chapter 10 specifies the powers of the employees who are authorized as judicial police in collaboration between the CMA and the Minister of Justice for clear authorization guided by the provisions of the financial and administrative laws and the consumer protection law.
The regulation included chapters on administrative penalties and reconciliation in breaches of the provisions of the law and the regulation. The last chapter is on the fees the CMA charges in consideration of the services it renders to the regulated entities.
It is noteworthy that the decision repealed Decision No. 137/2002 related to the election of directors and their responsibilities, the provisions related to the assignment of rights issue of capital increase shares, decision No. 8/2018 on the accreditation of auditors, and decision No. 10/2018 on the rules for constitution of the audit committee and appointment of an internal auditor and legal advisor of public joint-stock companies.
Chapter 10 specifies the powers of the employees who are authorized as judicial police in collaboration between the CMA and the Minister of Justice for clear authorization guided by the provisions of the financial and administrative laws and the consumer protection law.
The regulation included chapters on administrative penalties and reconciliation in breaches of the provisions of the law and the regulation. The last chapter is on the fees the CMA charges in consideration of the services it renders to the regulated entities.
It is noteworthy that the decision repealed Decision No. 137/2002 related to the election of directors and their responsibilities, the provisions related to the assignment of rights issue of capital increase shares, decision No. 8/2018 on the accreditation of auditors, and decision No. 10/2018 on the rules for constitution of the audit committee and appointment of an internal auditor and legal advisor of public joint-stock companies.
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