Al Salmi: Regulations translates economic principles of the Basic Statute of the state on encouraging investments and savings
BUSINESS REPORTER –
MUSCAT, MARCH 1 –
Sultan bin Salim al Habsi, Minister of Finance and Chairman of the Board of Directors of the Capital Market Authority (CMA), 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 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 appointment of the internal auditors and legal advisers 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 18/2019 to achieve legislative adequacy and readiness that would enhance the confidence of investors in the Omani capital market and make it sustainable engine of economic growth and wealth creation.
On the importance of the regulations for the listed companies, Shaikh Abdullah bin Salim al Salmi, Executive President of the Capital Market Authority (CMA), 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.
Al Salmi added that CMA, to improve the investment environment and encourage the initiatives aimed at enhancing the role of the private sector in the sustainable development, prepared 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 ensuing, 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 regulations embraced a number of provisions and rules including the rules for 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 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 public offering, mergers and conversion of companies, terms and conditions for transformation into 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 internal audit either through 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 authorised as judicial police in collaboration between the CMA and the Minister of Justice for clear authorisation 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 137/20002 related to election of directors and their responsibilities, the provisions related to assignment of rights issue of capital increase shares, Decision 8/2018 on the accreditation of auditors and Decision 10/2018 on the rules for constitution of audit committee and appointment of internal auditor and legal adviser of public joint stock companies.