Saudi CMA publishes draft rules for issuing depositary receipts

The Capital Market Authority (CMA), Saudi Arabia’s market regulator, on Monday published draft rules for issuing depositary receipts outside the Kingdom for local shares.

Feedback and proposals on the draft rules may be sent to the market regulator until Sept. 25, the CMA said in a statement.

The new rules relate to regulating the issuance of depositary receipts outside the Kingdom for locally- issued shares, requirements for the CMA approval as well as the obligations of the issuer and depositary bank.

Under the regulations, the issuer is required - after obtaining the CMA’s approval to issue depositary receipts - notify the market regulator immediately of listing such receipts in the foreign market.

The issuer in agreement with the depositary bank will develop a mechanism for distribution of the voting rights related to shares for depositary receipt holders, in line with the procedures set by the Depositary Centre.

The issuer must disclose to the public in the Kingdom all the information ahead of announcing these information in the foreign market.

The issuer is required to provide the information included in the foreign market prospectus in the form of a document for the public in the Kingdom.