CMA LAW: Circular No. (05) of 2023 Regarding the Ultimate Control Rate of the Beneficial Owner over a Client, and the Ex-officio Controllers within the Primary Client

“Circular to All Licensed Persons to Practice Securities Activities”

Chairman of the Board of Directors

Greetings,

With reference to the subject above, the CMA would like to draw your attention to the definition of beneficial owner stipulated in Article (1) of Law No. (106) of 2013 Regarding Anti-Money Laundering and Combating Financing of Terrorism, and to the provisions of the articles of Module Sixteen “Anti-Money Laundering and Combating Financing of Terrorism” of the Executive Bylaws of Law No. 7 of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and their amendments, which requires the person who is licensed to practice securities activities to perform procedures of due diligence on the beneficial owner within the primary client. In this regard, the CMA notes that the ultimate control rate of the beneficial owner over the client, on which the licensed person shall perform procedures of due diligence, is (25%) as a minimum, and that the list of ex-officio controllers within the primary client shall include, as a minimum, each of: (Members of the Board of Directors, CEO and CEO deputies that occupy executive positions and perform businesses related to the main activities of the client, those authorized to sign on behalf of the client and any natural person that the company deems a beneficial owner within the client). Accordingly, you are required to update the company’s work policies and procedures and comply with this Circular.

Best wishes,

Prof. Ahmad Al-Melhem
Issued on: 19/03/2023

Copy of the Official Document

Disclaimer: The information provided on this page is for reference purposes only, visitors are encouraged to review and understand the information provided in the official scanned document attached in the link above (if available). The CMA endeavors to ensure that the information on this page is complete and accurate, but the CMA does not guarantee the quality, accuracy, or completeness of any content at any time. In the event the information on this page is different from the content in the official scanned document attached in the link (if available), the official scanned document attached shall take precedence.