CMA to issue new investment rules

Updated 07 April 2015
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CMA to issue new investment rules

Mohammed Abdullah Aljadaan, chairman of the Capital Market Authority (CMA), summarized CMA’s last year performance and accomplishments as well as the initiatives it aims to achieve in the future, in his introductory speech in CMA’s annual report for the fiscal year 2014.
Aljadaan explained that one of the most important achievements last year was developing and approving CMA’s strategic plan for the five-year period (2015-2019). The plan includes 13 goals, which are broken down into four main strategic themes: foster capital market development, promote investor protection, improve the regulatory environment, and enhance CMA’s organizational excellence.
During the preparation of the strategic plan, the most important challenges to the capital market, its needs, other influential factors, as well as the views and comments of specialists at the CMA and those of market participants such as listed companies, authorized persons (APs) and investors have been studied and taken into consideration, he said.
As for CMA’s accomplishments during 2014, the chairman explained that it continued its efforts to develop and regulate the capital market by approving the Credit Rating Agencies Regulations, which would be implemented from Sept. 1.
In terms of strengthening disclosure and protecting investors, CMA’s board issued its resolution to suspend trading the shares of a listed company if the certified public accountant’s report on its preliminary or annual financial statements included a disclaimer of opinion or an adverse opinion and it will be lifted after removing the disclaimer of opinion or an adverse opinion from the financial reports.
The chairman said that CMA will issue the Rules for Qualified Foreign Financial Institutions Investment in Listed Shares and update the Investment Funds Regulations. The teams working on these two projects are reviewing and studying all the comments and observations received from the public and interested parties and are updating the regulations for approval.
On another note, 2014 witnessed an increase in the public offering of shares as its operations exceeded SR25.2 billion with 1185.9 percent increase from 2013. Total amounts raised from securities offerings reached SR69.1 billion up 15.3 percent from 2013.
As part of its continuous efforts to protect investors, CMA has started applying its board’s resolution to adopt the instructions and procedures related to listed companies with accumulated losses reaching 50 percent or more of its capital. By the end of 2014, the number of companies with accumulated losses reached 12 companies, of which four companies had accumulated losses of 75 percent or more of its capital.
Aljadaan pointed out that CMA last year continued to monitor websites and social media networks using the latest monitoring tools to detect violations of the Capital Market Law and its implementing regulations.
CMA recorded an increase in alerts on irregularities in the electronic media, which increased by 23 percent from 2013. This caused CMA to increase its efforts to intensively search these mediums, and such efforts rose by 66.6 percent from 2013.
CMA also continued its cause and cycle inspection visits on Authorized Persons (APs). The number of licenses covered by inspections in 2014 totaled 161 licenses pertaining to 56 APs.
As part of its endeavors to overcome difficulties that may face complainants, CMA has provided a set of channels for receiving complaints. The complaints handled by CMA are classified based on their nature and process.
CMA resolved 485 complaints in 2014, up 39 percent from 2013. It also prepared notifications/notices for 112 complaints it received to enable complainants to file their complaints to the Appeal Committee for the Resolution of Securities Disputes (ACRSD).
Aljadaan concluded by thanking Custodian of the Two Holy Mosques King Salman, Crown Prince Muqrin and deputy premier, Prince Mohammed Naif, deputy crown prince, second deputy premier and minister of interior, and Prince Mohammed bin Salman, minister of defense, president of the royal court and special adviser to the king for their support and care.


India names Modi demonetization backer as cenbank head

Visitors are seen standing next to a logo of the Reserve Bank of India (RBI) at the bank's head office in Mumbai on December 5, 2018. (AFP)
Updated 12 December 2018
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India names Modi demonetization backer as cenbank head

  • Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization

MUMBAI: Ex-finance ministry official Shaktikanta Das took charge of the Reserve Bank of India on Tuesday, in a swift appointment expected to ease a dispute with the government as it pushes for looser credit rules ahead of a general election.
The announcement by Prime Minister Narendra Modi’s administration came just a day after Urjit Patel resigned from the post, following months of clashes between the two institutions over lending curbs and how to deploy the central bank’s surplus reserves.
Pressure on the RBI to take immediate steps to boost the economy, including a transfer of the excess reserves to the government, could well rise after Modi’s ruling Bharatiya Janata Party (BJP) suffered likely election losses in three key states on Tuesday.
Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization — will serve a three-year term as governor, effective immediately.
RBI watchers said they expected the 61-year-old, who retired last year as secretary of the department of economic affairs having previously served on the RBI’s board, to put relations between the Mumbai-based bank and the finance ministry in New Delhi on a stabler footing.
Investors will also look closely at his ability to hold up against outside influences after recent efforts by the Modi government to gain greater control over the central bank’s regulatory powers.
“The incoming governor will have to work hard to prove that he has his own independent mind,” said Deepak Jasani, head of retail research at Hdfc Securities.
Investors said any openly political appointee with little macro-economic experience, would not sit well with financial markets that already sold off following the BJP’s election setbacks.
But Ashish Vaidya, executive director and head of trading at DBS Bank in Mumbai, said he expected India’s debt and currency markets to react positively.
“He is a bureaucrat...We expect the RBI to take a pragmatic approach under him, be pro-growth and change its stance going ahead given that inflation has come off sharply,” he said.
Finance Minister Arun Jaitley told Reuters partner ANI that the government acknowledged the bank’s independence.
“Government will fully support the RBI and coordinate with it in areas where consultations of government are required to make sure India’s economy benefits from both government policy decisions and areas which fall within domain of the RBI,” ANI tweeted, quoting Jaitley.

SWIFT APPOINTMENT
Pronab Sen, India’s former chief statistician, said he was surprised by the speed of Das’s appointment.
“If you have a situation where a position as important as the governor of the RBI is filled within 24 hours of the resignation of the incumbent, that will raise eyebrows,” Sen told Reuters.
“People are going to say, clearly this guy had already been identified. And, the situation was created where Urjit Patel had to quit.”
Das — widely seen as a contender for the top RBI job after Raghuram Rajan’s term ended in 2016 — did not answer calls from Reuters to his mobile phone.
RBI officials who have worked with him closely said Das was likely to be more inclusive in the decision-making process than Patel.
“He has a balanced approach and is good at consensus building,” said a former deputy governor. .”..We have had our fair share of differences. But he has always been solution-centric rather than festering on those differences.”
Das worked in the finance ministry under both Modi’s government and the previous coalition led by the main opposition Congress party and was also involved in drafting the Insolvency and Bankruptcy code aimed at protecting small investors.
He came under fire for his pro-demonetization stance and was the most vocal bureaucrat at the time Modi withdrew the high-value bank notes to fight tax evasion.
Das last year criticized the methodology of global rating agencies and sought a sovereign rating upgrade for India.