Regulatory Alerts2023-01-15
Securities and Exchange Commission Regulations 2022: Regulatory Bylaw No. 10 on Disclosure of Significant Shareholdings
The Securities and Exchange Commission issued Bylaw No. 10 of its 2022 Regulations to mandate the disclosure of significant shareholdings, defined as direct or indirect ownership of 10% or more of a listed company's shares. The regulation requires investors, listed companies, and the depository center to report initial holdings and any subsequent changes of one percentage point to the Authority, the market, and relevant parties within specified timeframes. Non-compliance with these disclosure obligations and deadlines is subject to penalties under Law No. 74 of 2004.
Securities and Exchange Commission Regulations for the Year 2022 Regulatory Bylaw No. (10) Disclosure of Significant Shareholdings
Article (1) The following terms shall have the meanings set forth opposite them wherever they appear in these Regulations:
Significant Shareholdings: Direct or indirect ownership of 10% or more of the shares of a listed company.
Natural Person: The individual, their spouse, and their children.
Legal Person: The company along with its subsidiaries and affiliates.
Point: A percentage (1%) of the total shares of the listed company.
Article (2) Entities required to disclose significant shareholdings:
A. The Investor: First: Any natural or legal person whose ownership percentage reaches 10% or more of the shares of a listed company must immediately notify the Authority and the Market. Second: Any natural or legal person must notify the Authority and the Market within one week of any transaction or action that results in an increase or decrease in the percentage mentioned in (First) above by one point.
B. The Listed Company: Every listed company must disclose in its annual report the number of shareholders who own 10% or more of its issued shares.
C. The Depository Center: First: The Depository Center must notify the Authority, the Market, and the concerned company of persons who own 10% or more of the shares of the listed company, as stated at the end of each quarter of the calendar year. Second: The Depository Center must notify the Authority, the Market, and the concerned company of changes in the balances of the aforementioned shareholders by one point, whether an increase or a decrease.
Securities and Exchange Commission Regulations for the Year 2022
Article (3) The following phrase shall be added to the Purchase and Sale Authorization Form: "I agree to be informed of Regulatory Bylaw No. (10) regarding the disclosure of significant shareholdings and I undertake to comply with the specified deadlines therein."
Article (4) Persons and companies in violation shall be subject to the penalties stipulated in Law No. (74) of 2004.