New CMA rules for listed firms to convene general meeting

Muscat: The Capital Market Authority (CMA) has announced resumption of general meetings of joint public stock companies and investment funds via the electronic portal of Muscat Clearing and Depository Company (MCDC), which were suspended in mid-March in line with the guidelines of the Supreme Committee tasked managing the COVID-19 pandemic.

The decision to resume the convening of general meetings was made after the establishment of a suitable setting that enables all the listed companies and funds to convene their meetings virtually.

The rules for convening the general meetings of the issuers of securities via electronic means were issued vide Decision E/25/2020 of the Chairman of the Capital Market Authority and the completion of the electronic portal executed by MCDC in collaboration with Omantel and Blockchain Solutions and Services as a local, secure portal to facilitate the convening of general meetings.

Shaikh Abdullah Salim al Salmi (pictured), Executive President of the CMA said: “We appreciate the cooperation and coordination between the CMA as the regulator and supervisor of the capital market and MCDC which collaborated with Omantel and Blockchain Solutions and Services to develop a local and secure solutions according to local requirements to enable the companies and funds to convene their annual general meetings in light of the exceptional circumstance due to the COVID-19 epidemic.

“The issuance of the rules enables the shareholders and unit-holders an opportunity to participate in the general meetings without the need to physically attend but via electronic means and take part in the consideration and voting on the agenda which will ensure wider participation by investors in the general meetings not only in the current circumstances but at all times in the future as shareholders will be able to attend physically or through the system.

“The portal administered by MCDC will be the secure system for convening general meetings and prepared according to the legal and procedural requirements for such meetings, and all proceedings, voting and counting the votes in the election of the directors will be through the portal further to the features of the portal such as security, confidentiality of information and was prepared locally by Omanis in accordance with the applicable laws and regulations and technical needs for convening such meetings.

“The electronic portal allows shareholders and unit-holders to vote on any item in the agenda three days before the date appointed for the general meeting. The portal will keep the voting confidential and will not be revealed except during voting on the items in the day of the meeting. The system will be linked to the clearing system to ensure the vote will be of the security on the time of the general meeting which means a person who votes and then sells the security will not be entitled to such vote.”

Circular 8/2020 is a detailed guide for listed companies and funds to convene the meetings, said Al Salmi, adding that CMA made a temporary decision to speed up convening the suspended general meetings by publishing their agenda 10 days before the meeting instead of 15 days.

He pointed out that the rules and procedures  allow the shareholder to exercise his legal right to attend and vote in the general meeting either by attending personally to the  venue of the meeting or via electronic means as well as regulating the candidacy procedures for the membership  of the boards of directors and voting procedures. The rules also specified the mechanism of proving the quorum of the general meeting by three ways, by attending personally (when the circumstance allows) or via the link of the general meeting’s page on the day of the meeting and the third way is prior voting on the agenda.

He added that shareholders and unit-holders cannot attend by more than one method and that the system allows the juristic person only to authorize another person to attend the meeting and vote on their behalf. The decision not to allow proxies for individuals was made to encourage their attendance and participation in the discussion to take part in the decision making process as the portal eliminated an obstacle preventing their attendance for being residing away from the venue of the meeting or inconvenient time and venue of the general meeting.

The Executive President called on all the shareholders and unit-holders to update their details especially their telephone numbers through MCDC website or alternative communication methods provided by MCDC as the entity that keeps shareholders and unit-holders details to ensure success of the process.

With regard to candidacy to the boards of directors the rules explain that the candidacy form shall be submitted to the company or fund after filling all the details five days prior to the date appointed for the general meeting for election of members of the board or fund management. The company or fund shall disclose the candidates who are eligible under the form approved by the legal advisor and their profile on the MSM website three days before the meeting and the issuer of the security shall ensure entry of the details of eligible candidates  by the legal advisor  to the general meetings system in collaboration with MCDC.

The rule stipulates in Clause (12) that the period for voting shall not exceed five minutes except the election of the members of the board of directors which is ten minutes and the chairman of the meeting will announce commencement and end of voting.

Oman Observer

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