CMA: Listed companies should inform public about unfamiliar developments

Updated 17 February 2015

CMA: Listed companies should inform public about unfamiliar developments

The Capital Market Authority (CMA) has emphasized that it gives top priority to the listed companies’ disclosure since transparency is considered a basic element in creating a safe environment that attracts investors.
CMA is working on increasing the level of disclosure and transparency in the capital market and to achieve justice among investors. This is done by making sure that all listed companies comply to disclose any important events and material developments as well as financial reports accurately and in a timely manner. By that, investors can take their investment decisions based on accurate and trusted information from the company itself.
As part of CMA’s efforts to ensure transparency, efficiency and justice in the securities business and highlighting the importance of offering the information to the investors equally, the Listing Rules allocated a full chapter for continuous obligations of listed companies.
Article 41 of the Listing Rules stated that an issuer (the company issuing the securities) must notify the authority and the public without delay of any material developments in its sphere of activity which are not public knowledge and which may have an effect on the assets and liabilities or financial position or on the general course of business of the issuer or its subsidiaries and which may lead to movements in the price of the listed securities, or significantly affect an issuer’s ability to meet its commitments in respect of debt instruments.
The material developments, which the issuer must disclose to the authority and announce it on the CMA website, include, but are not limited to, the following:

• Any transaction to purchase or sell an asset at a price equal to or greater than 10 percent of the net asset of the issuer, the issuer’s disclosure must contain the following information (where applicable): Transaction details, conditions, parties involved and funding method, description of the business subject of the transaction, three years’ financial information of the asset subject of the transaction, transaction reasons and expected effects on the issuer and its operations as well as a statement on the use of proceeds;

• Any debt outside the issuer’s ordinary course of business, of a value equal to or greater than 10 percent of the issuer’s net assets;

• Any losses equal to or greater than 10 percent of the issuer’s net assets;

• Any significant change in the issuer’s production environment or activity, including but not limited to the availability of resources and the possibility of obtaining them;

• Any changes in the composition of the directors or to CEO’s position of the issuer;
Any significant legal proceedings where the value involved is equal to or greater than 5 percent of the net assets of the issuer;

• The increase or decrease in the net assets of the issuer equal to or greater than 10 percent;

• The increase or decrease in the gross profit of the issuer equal to or greater than 10 percent;

• The entering into, or the unexpected termination of, any contract with revenues equal to or greater than 5 percent of the gross revenues of the issuer;

• Any transaction between the issuer and a related party or any arrangement through which the issuer and a related party invest in any project or asset or provide financing therefor;

• Any interruption in the principal activities of the issuer or its subsidiaries.

CMA, as stated in the Listing Rules, obliges the listed company to disclose and announce to the public any information or material developments at least two hours before the start of the trading period.
It also urges them to develop policies and procedures related to the disclosure to ensure the company’s fulfillment to its obligations in this area.
The policies should include the procedures to announce the financial information in order to ensure the consistency of the announcement with the procedures.
The company’s employees should follow up with relevant officials in the Saudi stock exchange (Tadawul) until the announcement is accepted and published.
CMA insures its devotion to develop the capital market and apply developed rules and regulations that would increase the efficiency and transparency and encourage investing in the market.


China's aviation regulator raised concerns with Boeing on 737 MAX design changes

Updated 12 December 2019

China's aviation regulator raised concerns with Boeing on 737 MAX design changes

  • China is reviewing the airworthiness of the plane
  • China was first country to ground plane in March

BEIJING: China’s aviation regulator raised “important concerns” with Boeing Co. on the reliability and security of design changes to the grounded 737 MAX, it said on Thursday, but declined to comment on when the plane might fly again in China.
China is reviewing the airworthiness of the plane based on proposed changes to software and flight control systems according to a bilateral agreement with the United States, Civil Aviation Administration of China (CAAC) spokesman Liu Luxu told reporters at a monthly briefing.
He reiterated that for the plane to resume flights in China, it needed to be re-certified, pilots needed comprehensive and effective training to restore confidence in the model and the causes of two crashes that killed 346 people needed to be investigated with effective measures put in place to prevent another one.
China was the first country to ground the 737 MAX after the second crash in Ethiopia in March and had set up a task force to review design changes to the aircraft that Boeing had submitted.
The US Federal Aviation Administration (FAA) will not allow the 737 MAX to resume flying before the end of 2019, its chief, Steve Dickson, said on Wednesday.
Once the FAA approves the reintroduction into service, the 737 MAX can operate in the United States, but individual regulators could keep the planes grounded in other countries until they complete their own reviews.
“Due to the trade war, the jury is still out on when China would reintroduce the aircraft,” said Rob Morris, Global Head of Consultancy at Ascend by Cirium.
Chinese airlines had 97 737 MAX jets in operation before the global grounding, the most of any country, according to Cirium Fleets Analyzer.