Regulatory Alerts2023-02-14
Regulatory Bylaw No. 10 on Disclosure of Material Shareholdings
The Capital Markets Authority issued Regulatory Bylaw No. 10 to mandate the disclosure of material shareholdings exceeding 10% in listed companies. The regulation imposes strict reporting obligations on investors, listed companies, and the Depository Center to notify the Authority and the Market of initial holdings and any subsequent changes of one percentage point. Non-compliance with these disclosure requirements and timelines is subject to penalties under Capital Markets Law No. 74 of 2004.
Capital Markets Authority Regulatory Bylaws for the Year 2022 Regulatory Bylaw No. (10) Disclosure of Material Shareholdings
Article (1) The following terms shall have the meanings indicated below wherever they appear in these Bylaws:
Material Shareholdings: Ownership by a person or a non-person (10%) or more of the shares of a listed company.
Natural Person: The person, their spouse, and their children.
Legal Person: The company along with its affiliated and associated companies.
Point: A percentage (1%) of the total shares of the listed company.
Article (2) Parties Required to Disclose Material 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 thereof. Second: Any natural or legal person must notify the Authority and the Market within one week of any transaction or transfer 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 a percentage of (10%) or more of the shares of the listed company, as of 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 decrease.
Article (3) The following phrase is added to the form of authorization for purchase and sale: "I confirm my review of Regulatory Bylaw No. (10) regarding the disclosure of material shareholdings and I undertake to comply with the deadlines specified therein."
Article (4) Persons and companies violating these provisions shall be subject to the penalties stipulated in Law No. (74) of the year 2004.