H E Sultan Salim al Habsi, Minister of Finance and chairman of the board of directors of the Capital Market Authority (CMA), has issued a decision approving the Regulation for Public Joint Stock Companies.
The regulation covers all the regulatory aspects related to the public joint stock companies focusing on providing a legislative framework for all their operations and activities, a statement issued by the CMA said on Monday.
The decision issued by H E Habsi states that the regulation shall have effect on the day following its publication in the Official Gazette except the provisions related to appointment of the internal auditors and legal advisors which will be effective after six months.
The issuance of the regulation was based on the provisions of the Commercial Companies Law enacted by Royal Decree No 18/2019 to achieve legislative adequacy and readiness that would enhance the confidence of investors in the Omani capital market and make it a sustainable engine of economic growth and wealth creation.
Commenting on the importance of regulation for the listed companies, H E Abdullah Salim al Salmi, executive president of the CMA, said the issuance of the regulation coincides with comprehensive structural review of the legislative framework of Omani capital market after more than 30 years, to configure it to be a key financing tool to achieve national priorities of Oman’s 2040 Vision.
To improve the investment environment in the country and encourage the initiatives aimed at enhancing the role of private sector in sustainable development, H E Salmi said the CMA prepared the regulations taking into account easing the processes and limiting its role to supervision and follow up and to allow the companies the freedom of implementing their plans and strategies within a clear legislative framework.
According to H E Salmi, the regulations embraced a number of provisions and rules including the rules for election of the directors of public joint stock companies and their responsibilities. “The key change was that the candidates will only be natural persons for the stability of the boards of directors and to limit the changes in composition of the board. Also, the limit for annual remuneration of directors has been increased to RO300,000 in accordance with specific rules.”
The Regulation for Public Joint Stock Companies comprises 12 chapters on the establishment of the public joint stock company, issuance of shares in public offering, mergers and conversion of companies, terms and conditions for transformation into public company or the public company into another form, company management and general meetings.
The regulation states (in Chapter 9) that a public joint stock company shall conduct internal audit either through an independent in-house unit or engage an audit firm accredited by the CMA. Also the regulation required the companies to have a legal advisor either a whole time employee with adequate qualifications and experience or engage a licensed law firm registered with the CMA.
The Chapter 10 specifies the powers of the employees who are authorised as judicial police in collaboration between the CMA and the Minister of Justice for clear authorisation guided by the provisions of the financial and administrative laws and the consumer protection law.
The regulation also includes chapters on administrative penalties and reconciliation in breaches of the provisions of the law and the regulation. The last chapter is on the fees the CMA charges in consideration of the services it renders to the regulated entities.