In order to enhance transparency
The Capital Market Authority (CMA) obliges companies to 10 elements in their announcements
<In order to enhance transparency and ensure clarity and transparency, the Capital Market Authority (CMA) emphasized its keenness to increase the degree of disclosure and transparency in the announcements of listed companies in the capital market, which helps investors and traders to make their investment decisions based on correct and complete information.
Conditions and controls
In order to achieve these objectives, the CMA issued in 2006 the first version of the instructions for company announcements, which was then updated in 2008, and during the fourth quarter of last year 2012, these instructions were updated and amended to work from the beginning of this year 2013, and these instructions cover company announcements in the event of news or a material development that occurred or is expected to occur, with special instructions for banks and insurance companies.
The Authority stated that these instructions specify the basic data that must be available in all announcements of listed companies that are broadcast through the “Tadawul” system, including announcements of listed companies related to financial results, change in capital, or general assemblies. The title of the announcement must be clear and reflect the material development to be announced, provide a detailed description of the material development, clarify all related information and dates related to it, explain the factors and justifications that led to the occurrence of the material development, and if the material development has a financial impact on the financial statements, the financial impact of the material development must be mentioned, and if this is not possible, the reason must be mentioned.
Materiality
The CMA stressed that the company must exercise due diligence to ensure that any facts or information related to that material development is correct and not misleading, and the company must not exclude, omit or conceal any information that could affect the content or results of the material development, pointing out that if the material development results in any financial obligation on the company or the pledge of assets, the announcement must include the terms, duration and value of this obligation or pledge, the parties that are party to it and its impact on the financial statements.
She explained that the instructions require the company to develop policies and procedures regarding the disclosure of material developments that ensure that the company fulfills its obligations in this field and develop procedures for announcing financial information to ensure that the announcement is consistent with these instructions with the continued follow-up of the company's employees with the specialized staff at the Saudi Stock Exchange Company (Tadawul) until the format of the announcement is accepted and published. The policies and procedures referred to must include the names of the persons responsible in the company for publishing in case of emergency events and determine the degree of their powers in the field of publication and the names of other persons in case the person concerned is not present during the occurrence of the event.
Announcing developments
The CMA stated that the listed company must realize that material developments may occur during the preparation of periodic financial statements and in this case the company must announce these material developments immediately and not wait until the issuance of its financial statements, even if this occurs shortly before the publication of the financial results. She pointed out that with regard to responding to rumors, the company must determine the need to broadcast an announcement on the Tadawul website to respond to any rumors related to any material developments, and the Authority has the right to oblige companies to broadcast an announcement whenever it deems it necessary.
She said that the new instructions included special instructions for announcements of management changes in listed companies in addition to amendments to announcements related to the change in capital and general assemblies of listed companies. The new instructions also included additional requirements if the company's announcement of a material event or significant development is related to dividends, memorandums of understanding, sale and purchase of assets, lawsuits, supplementary and corrective announcements, and these instructions specify the basic data that must be available in all company announcements.
These instructions specify the basic data that must be available in all company announcements.
