CMA LAW: Circular No. (6) of 2017 Regarding Reviewed Periodical Financial Statements and Annual Audited Financial Statements

"Circular to All Licensed Persons Except Investment Funds"

Chairman of the Board of Directors 

Greetings,

The Capital Markets Authority has set a number of provisions in the Executive Bylaws of Law No. (7) of 2010 on the Establishment of the Capital Markets Authority and Regulating Securities Activities in order to regulate the supervision and oversight of the licensed persons to ensure that their accounts are reviewed by auditors registered with the CMA, after it had regulated the auditors registered with the CMA in Chapter Three of Module Five of the Executive Bylaws, and also to ensure providing the appropriate methods for the CMA to verify the licensed persons’ compliance with the provisions of Law No. (7) of 2010 and its Executive Bylaws, and to continually observe their financial situations.

After more than a year of enforcing the new Executive Bylaws of Law No. (7) of 2010, the CMA has rated, during such period and the preceding period, the compliance of the licensed persons with the provisions of Law No. (7) of 2010 and its Executive Bylaws. It has also rated the efficiency and effectiveness of the services related to the audit functions of the licensed persons in order to ensure the start of adopting the international practices in this regard, which showed that CMA’s counterparties do not ratify the financial statements of persons subject to their supervision, nor do they approve them by any means. Accordingly, and in implementation of CMA Board of Commissioners Resolution No. (C.B.C/9-15 of 2017) and starting from 1/6/2017, the draft reviewed periodical financial statements, and the draft audited financial statements shall not be ratified by the CMA. Additionally, starting from the mentioned date, the CMA shall cease issuing letters asking to be informed about the financial statements, provided that the licensed persons shall send the reviewed periodical financial statements and the annual audited ones, as well as the auditor’s report, to the CMA within a period that does not exceed:

a. 45 days after the end of the financial period subject of the statement, relevant to the periodical ones.
b. 90 days after the end of the financial period subject of the statement, relevant to the annual ones.

It shall be taken into consideration that the financial statements shall be sent at the same time of their disclosure to the Exchange or before.

Any provision mentioned in another circular which conflicts with this circular shall be annulled.                  

        
Dr. Nayef Falah Al-Hajraf
Chairman, CMA Board of Commissioners 

Issued on: 25/4/2017   

Copy of the Official Document

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