This regulation aims to organize financial market institutions and registered persons, define the procedures and conditions for obtaining a license, the conditions for the continuation of the license or registration, and specify the code of conduct that financial market institutions must adhere to while performing their work, as well as the rules and provisions for conducting business, supervisory systems and procedures, and provisions related to clients' funds and assets.

A) The term (Law) wherever mentioned in this Regulation refers to the Capital Market Law issued by Royal Decree No. M/30 dated 2/6/1424 AH.

B) The words and phrases mentioned in this Regulation shall have the meanings assigned to them in the Law and in the glossary of terms used in the regulations and rules of the Capital Market Authority, unless the context dictates otherwise.

A) The Financial Market Institution and the registered person must comply with all regulations and rules applicable to them, and provide the Authority without delay with all information, records, and documents that the Authority may request for the purpose of implementing the Law and its executive regulations.

B) The administrative body of the Financial Market Institution, its employees, and the registered persons must comply with any request issued by the Authority to attend to clarify any matter or assist in any investigation related to the implementation of the Law and its executive regulations.

• A) The Authority may exempt the applicant or the financial market institution from applying any of the provisions of this Regulation, in whole or in part, either based on a request received from them or on its own initiative.

• B) The Authority announces the exemption from any provision when it deems:

  • 1) That the exemption from the provision can apply to more than one category of financial market institutions.

  • 2) And that the announcement of the exemption will not negatively and materially affect the financial market institutions.

• This is to achieve the policy of encouraging competition while maintaining equality and equal opportunities among financial market institutions.

• A) The principles stipulated in this chapter constitute a general statement of the fundamental obligations of financial market institutions; aiming to establish a general concept of the standards of conduct required of them under this regulation.

• B) The financial market institution must adhere to the following principles:

  • 1) Integrity, by conducting its business with integrity.

  • 2) Skill, care, and diligence, by conducting its business with skill, care, and diligence.

  • 3) Effective management and supervision, by taking all reasonable measures to organize its affairs responsibly and effectively and adopting appropriate policies and systems for risk management.

  • 4) Financial adequacy, by maintaining sufficient financial resources according to the rules set by the Authority.

  • 5) Appropriate market conduct, by adhering to appropriate standards of conduct in the market.

  • 6) Protection of client assets, by arranging adequate protection for its clients' assets.

  • 7) Cooperation with regulatory and supervisory authorities, including disclosure to the Authority of any material event or change in its operations or organizational structure.

  • 8) Communication with clients, by providing them with information clearly, fairly, and without misleading.

  • 9) Considering clients' interests, by treating them fairly and justly and taking their interests into account.

  • 10) Managing conflicts of interest, by dealing with conflicts of interest between itself and its clients or between one client and another fairly.

  • 11) Suitability for clients, by exercising due diligence to ensure the suitability of its advice and management for any client to whom it provides those services.