The purpose of this Regulation is to organize financial market institutions, registered persons, and to specify the procedures and conditions for obtaining a License, the conditions for the continuation of the License or registration, and to outline the rules of conduct that financial market institutions must adhere to while carrying out their work, as well as the rules and provisions for conducting business, the regulatory systems and procedures, and the provisions related to clients' funds and assets.

A) The term "Law" wherever it appears 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 contained in this Regulation shall have the meanings defined in the Law and in the glossary of terms used in the regulations and rules of the Capital Market Authority, unless the context of the text requires 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 respond to any request issued by the Authority to appear to clarify any matter or to assist in any investigation related to the implementation of the Law and its executive regulations.

(a) The Authority may exempt the claimant or the financial market institution from the application of any provisions of this regulation, either wholly or partially, either upon 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) That the announcement of the exemption will not adversely and materially affect the financial market institutions.

This is in pursuit of a policy to encourage competition while maintaining equality and equal opportunities among financial market institutions.

A) The principles set forth in this section constitute a general statement of the fundamental obligations of financial market institutions; with the aim of establishing a general concept of the required standards of conduct 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 control, 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 bodies, including declaring to the authority any significant event or change in its operations or organizational structure.

8) Communication with clients, by providing them with information in a clear, fair, and non-misleading manner.

9) Consideration of client interests, by treating them fairly and justly, and taking their interests into account.

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

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