New Securities Law paves way for SME exchange, ETFs

The Capital Market Authority on Wednesday discussed the New Securities Law issued by Royal Decree 46/2022 earlier this year.

The Law seeks to support Small and Medium Enterprises (SMEs) by a creating stock exchange to establish or provide a real market or electronic system bringing together the buyers and sellers of the shares or securities of SMEs.

The Consumer Consumers Protection Fund will help compensate the consumers dealing with such entities in the event of losses to their assets kept with them. Members of the fund are the entities operating in the field of securities.

Abdullah Salim al Salmi, the Executive President of the Capital Market Authority (CMA), said the law seeks to protect the consumers in the Omani capital market and ensure a financing environment with multiple options and a high ability to attract local and foreign capital through enhancing the public’s confidence.

Speaking to the media persons, Salmi said that the plan for the SME is in the first stage of market analysis and the project will start in 2023.

The press conference revealed that the regulations are ready for the Exchange Traded Funds (ETFs) are ready and will be available for public consultation in the first quarter of 2023.

HE said that the law focuses on the companies operating in the field of securities, clearing, custodianship as well as derivatives and other products.

On the key features of the law, Salmi said the law copes with the development of the technological revolution and provides legal coverage related to the requirements of Fintech, which would contribute, to providing financial support for the economic sectors employing innovative financial solutions.

The law confers on the CMA the power to regulate innovative funding and the approval of implementation of technology and virtual and digital investments and allow for expanding funding options through new products and services such as warehouse receipts, derivatives, etc.

He said that the laws created the required legislative infrastructure to ensure the independence of the MSX from the CMA and to proceed as a self-regulated institution. The law enabled the stock exchange to regulate brokerage activities, market making, and margin financing. The law allows licensing stock exchange for SMEs and focuses on achieving the principle of fairness and consumer protection in the capital market in the Sultanate of Oman by setting out the determinants and international practices including those issued by the International Organization of Securities Commissions (IOSCO). The law provided the legislative framework for addressing the inadequacies in the rating report prepared by Thomas Murray on Muscat Clearing and Depository Company that would enhance the rating of the company to higher levels strengthening its status among its peers.

The law addressed an importance matter, which would contribute to the development of the capital market in that it encouraged the creation of independent entities carrying out investment banking activities to render consultancy services related to funding options, takeovers, acquisitions and other services.