CMA LAW: Circular No. (11) of 2017 Regarding General Assemblies for licensed persons

Circulars

Circular No. (11) of 2017 Regarding General Assemblies for licensed persons

 Circular to All Licensed Persons

Chairman of the Board of Directors 

Greetings,

With reference to CMA’s Board of Commissioners Resolution No. (63) of 2017 on amending the Executive Bylaws of law No. (7) of 2010 on the Establishment of the Capital Markets Authority and Regulating Securities Activity and its amendments, and in particular the amendment of Article 1-18 of Module Five (Securities Activities and Registered Persons) in addition to Clause No. (8) which states the following:

“A licensed Person shall notify the Authority of the agenda and place of the ordinary and extra ordinary general assembly’s meeting -along with all documents relevant to the items listed on the agenda- at least ten Business Days prior to the commencement of the meeting.”

And further to Circular No. (7) of 2017 concerning General Assemblies issued on 25/4/2017, the Authority would like to draw your attention to the following:

First: In the event that the Company submits to the Ministry of Commerce and Industry a request for the convening of an Ordinary General Assembly, the following subjects shall be included in the agenda of the Ordinary General Assembly as minimum:

- Reciting both the Governance Report and the Audit Committee Report.
- Report of the Board of Directors on the company's activity and financial position for the ended financial year.
- The auditor's report on the financial statements of the company.
- In the case of listed companies licensed to operate in accordance with the provisions of Islamic Sharia, the of external Sharia Audit Office reports on the extent to which the commercial and financial transactions of the licensed person comply with Sharia standards and the relevant resolutions of the Authority.

- Report any irregularities monitored by the regulatory authorities and have imposed sanctions on the company.
- Financial statements of the company.
- Suggestions of the Board of Directors on the distribution of profits.
- Discharge members of the Board of Directors from liability.
- Election or removal of board members.
- Proposals of the Board of Directors to determine their remuneration.
- Appointing the auditor of the company, determining his fees or delegating the board of directors to that, provided that the appointment is of the natural person registered in the auditors register with the Authority.
- In the case of listed companies licensed to operate in accordance with the provisions of the Islamic Sharia, appointing the external Sharia Audit Office, provided that it shall be registered in the register of the external Sharia Audit Offices at the Authority, and without the other listed companies that are not authorized to appoint the Sharia Supervisory Board for licensed persons.
- Transaction report made or to be made with the relevant parties, and the relevant parties shall be defined in accordance with IAS.

The approving item of distributing bonus shares shall not be included in the agenda of the Ordinary General Assembly except after obtaining the approval of the Authority.

Second: In the event that the company submits to the Ministry of Commerce and Industry a request for convening an Extraordinary General Assembly, none of the following items shall be included in the agenda without obtaining the approval of the Authority:

-Adjusting the name of the company or its activities.
- Adjusting the capital by increase or reduction.
- Issue ordinary or premium shares.
- Dissolution, merger, transformation or division of the company.

- Any further amendments on the prospectus and articles of association.

Based on the Memorandum of Understanding on Coordination of Cooperation between the Ministry of Commerce and Industry and the Capital Markets Authority signed on 21/11/2017, the Ministry shall undertake the procedures followed for the holding of Ordinary and Extraordinary General Assemblies, taking into account any comments that may be made by the Commission on the agenda.

Dr. Nayef Falah Al-Hajraf

Copy of the Official Document

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