The words and phrases mentioned below, wherever they appear, shall have the meanings specified unless the context of the text indicates otherwise:

- The Kingdom: The Kingdom of Saudi Arabia.

- The Authority: Capital Market Authority.

- The Council: The Council of the Capital Market Authority.

- The President: The President of the Council of the Capital Market Authority.

- The Person: Any natural or legal person recognized by the laws of the Kingdom of Saudi Arabia in this capacity.

- The Market: A licensed financial market - in accordance with the provisions of this Law - to conduct the business of trading securities in the Kingdom.

- The Trading: The buying and selling of securities.

- The Issuer: The person who issues securities or intends to issue them.

- The Affiliate: The person who controls another person, or is controlled by that other person, or who shares with that other person in being controlled by a third person.

- The Control: The ability or capacity, directly or indirectly, to exercise effective influence over the actions and decisions of another person.

- The Underwriter: The person who purchases securities from the issuer, or from an affiliate of the issuer, for the purpose of offering, marketing, and selling these securities to the public, or the person who sells on behalf of the issuer or an affiliate of the issuer, securities for the purpose of offering them to the public.

- The Relatives: The spouse, wife, and minor children.

- The Offering or Presentation of Securities: The issuance of securities, or inviting the public to subscribe to them, or promoting them directly or indirectly, or any statement or communication that is considered, in terms of its resulting effect, a sale, issuance, or offering of securities, excluding preliminary negotiations or contracts concluded with underwriters or between them.

- The Investment Advisor: An advisor who provides, offers, or agrees to provide advice to others, in their capacity as investors or potential investors, regarding the purchase of a security, its sale, subscription to it, guaranteeing it, or exercising any right arising from a security for the purpose of holding it, disposing of it, guaranteeing a security, or transferring it.

- The Center: The Securities Depository Center.

- The Committee: The Committee for the Settlement of Securities Disputes.

- The Executive Regulations: A set of rules, instructions, and procedures issued by the Authority to implement the provisions of this Law.

- The Internal Regulations: The regulations issued by the Authority regarding the administrative and financial affairs of the Authority and the affairs of its employees and workers.

- The Depository Center: A licensed securities depository center - in accordance with the provisions of this Law - to conduct in the Kingdom the operations of depositing traded securities in the market, transferring them, settling them, and registering their ownership.

- The Clearing Center: A licensed securities clearing center - in accordance with the provisions of this Law - to conduct in the Kingdom the operations of clearing securities.

Subject to the provisions of Article 3 of this Law, for the purposes of this Law, the term “securities” shall mean:

• a) the convertible and tradable shares of companies;

• b) tradable debt instruments issued by companies, the government, public entities, or public corporations;

• c) investment units issued by mutual funds;

• d) any instruments representing profit participation rights, any rights in the distribution of assets; or either of the foregoing; and

• e) any other rights or instruments the Board determines to be included or treated as securities if the Board believes that this furthers the integrity of the market or the protection of investors. The Board shall have the right to exercise its power to exempt from the definition of securities rights and instruments that otherwise would be treated as securities pursuant to paragraphs (a, b, c, and d) of this Article if it believes that it is not necessary to treat them as securities, based on the requirements of the integrity of the market and the protection of investors.

Negotiable instruments such as cheques, promissory notes, and order instruments shall not be considered securities, nor shall documentary credits, money transfers, instruments exclusively traded among banks, and insurance policies.

A. An Authority to be named the “Capital Market Authority” shall be established in the Kingdom and shall report directly to the President of the Council of Ministers. It shall have a corporate personality as well as financial and administrative autonomy. It shall be vested with all the powers necessary to discharge its duties and functions under this Law. The Authority shall enjoy the exemptions and facilities enjoyed by public corporations. Its staff shall be subject to the Labor Law.

B. The Authority shall be prohibited from engaging in any commercial activities, having special interest in any project intended for profit, borrowing or lending any funds, or acquiring, owning, or issuing any securities.

A - The Authority shall be the entity responsible for issuing regulations, rules, and instructions, and for applying the provisions of this Law. To this end, the Authority shall undertake the following:

• 1 - Organizing and developing the financial market, working to enhance and develop the methods of the devices and entities operating in the trading of securities, and developing procedures that can mitigate the risks associated with securities transactions.

• 2 - Regulating the issuance of securities, monitoring them, and dealing with them.

• 3 - Regulating and monitoring the activities and operations of the entities subject to the Authority's supervision and oversight.

• 4 - Protecting citizens and investors in securities from unfair, improper practices, or those involving fraud, deception, or manipulation.

• 5 - Working to achieve fairness, adequacy, and transparency in securities transactions.

• 6 - Regulating and monitoring the full disclosure of information related to securities, the entities issuing them, and the dealings of insiders, major shareholders, and investors in them, and determining and providing the information that market participants must disclose to shareholders and the public.

• 7 - Regulating requests for proxies, purchases, and public offerings of shares.

• 8 - Licensing the establishment of special purpose entities, regulating and monitoring their operations and uses, issuing securities, and registering them in the special register established by the Authority and the provisions of its establishment Law, and regulating the provisions for registering movable property to it, including documenting rights over it and their enforceability against third parties and issuing the rules governing that.

• 9 - Regulating the pledging of securities and the execution on them.

B - The Authority may publish the draft regulations and rules before issuing or amending them, and the regulations, rules, and instructions issued by the Authority shall take effect in accordance with their provisions.

C - For the purposes of conducting all investigations deemed necessary by the Council to apply the provisions of this Law and the regulations and rules issued in accordance with its provisions, the members of the Authority and its employees designated by the Council shall have the authority to summon witnesses, collect evidence, and request the submission of any records, papers, or any other documents that the Authority may deem relevant or important for its investigation. The Authority may inspect records and other documents regardless of their holder, to determine whether the person concerned has violated or is about to violate the provisions of this Law, the executive regulations, or the rules issued by the Authority.

D - The special purpose entity shall have an independent financial, personal, and legal status, and shall terminate upon the completion of the purpose for which it was established, in accordance with the rules and provisions issued by the Authority.

A - The Authority shall have the authority to carry out the tasks stipulated in this Law, as well as the regulations, rules, and instructions issued pursuant to it, including but not limited to:

• 1 - Establishing policies and plans, conducting studies, and issuing the necessary rules to achieve the Authority's objectives.

• 2 - Issuing the necessary executive regulations to implement the provisions of this Law and amending them.

• 3 - Approving the offering of securities.

• 4 - Providing opinions and recommendations to government entities on matters that may contribute to the development of the market and the protection of investors in securities.

• 5 - Suspending market activity for no more than one day, and in cases of necessity where the Authority or the Minister of Finance deems it necessary to suspend market activity for more than one day, a decision must be issued by the Minister of Finance approving that.

• 6 - Approving the listing, delisting, or suspension of the listing of any Saudi traded security in any securities market outside the Kingdom.

• 7 - Prohibiting any securities in the market or suspending their issuance or trading if the Authority deems it necessary.

• 8 - Determining the financial fees and commissions that brokers charge their clients if the Council deems it appropriate, and approving the financial fees and other commissions charged by the market, the deposit center, and the clearing center.

• 9 - In addition to what is stated in other related laws, the Authority shall set the standards and conditions that must be met by auditors who audit the market's books, the deposit center, the clearing center, and their records, brokerage firms, investment funds, listed joint-stock companies in the market, special purpose entities, and rating agencies. The Authority, while considering its supervisory responsibility, has the right to delegate this responsibility to the Saudi Organization for Certified Public Accountants.

• 10 - Determining the contents of annual and periodic financial statements, reports, and documents that must be submitted by issuers offering securities to the public or entities whose securities are listed in the market.

• 11 - Defining and explaining the terms and texts contained in this Law.

• 12 - Issuing the necessary decisions, instructions, and procedures to implement the provisions of this Law and its executive regulations, and conducting investigations into violations of the provisions of this Law and its executive regulations.

• 13 - Establishing internal regulations and issuing the necessary instructions and procedures for the management of the Authority.

• 14 - Approving the regulations of the market, the deposit center, and the clearing center, along with their rules and policies.

• 15 - Preparing regulations and rules for monitoring and supervising entities subject to the provisions of this Law.

• 16 - Approving the establishment, merger, and liquidation of investment funds and their operating rules in accordance with the provisions of Article 39 of this Law.

• 17 - Appointing a licensed auditor to audit the Authority's financial statements and final accounts.

• 18 - Granting the necessary licenses issued under the provisions of this Law and its regulations, including licensing rating agencies and the conditions thereof.

• 19 - Preparing the Authority's annual budget.

• 20 - Organizing the reporting of violations of the provisions of this Law and its executive regulations, as well as the regulations of the market, the deposit center, and the clearing center, including determining financial rewards for whistleblowers, the controls for disbursing and qualifying them, and the procedures that contribute to protecting whistleblowers.

• 21 - Establishing professional standards for brokers and their agents.

• 22 - Determining the minimum capital requirements for brokerage firms and the financial guarantees required from them, and verifying the financial strength and stability of brokers through periodic reviews of their compliance with capital adequacy standards, and establishing appropriate arrangements to protect the funds and securities deposited with brokerage firms.

B - In exercising its powers under this Law and its executive regulations, the Authority shall coordinate with the Saudi Central Bank regarding the procedures it intends to take, which may have implications for monetary conditions.