Article  (34) : The  Omani  joint  stock  company  shall  submit  a  listing  application  within one   month   from  the   date  of  registration  along   with  the   following   documents   and information:

 

1. Certificate of commercial registration and attachments thereto.

2. List of authorized signatories and specimens of their signatures.

3. Copies of the company’s memorandum, article of association and the prospectus.

4. An attested copy of the minutes of the constitutive general meeting.

5. Any additional requirements CMA prescribed deems fit.

This  provision  with  the  exception  of  Clause  (4)  shall  apply  to  the  companies  under transformation   to   public   joint   stock   companies   after   closure   of   subscription   and allotment. The company shall complete the procedures for registration in the Commercial Register within two (2) months from the date of listing.

 

Article  (35):  Notwithstanding  the  provisions  of  the  previous  Article,  listing  of  shares issued to increase the capital shall be as follows:

a. Bonus shares shall be listed within four (4) business days maximum from the date of record.

b. Shares  issued  to  increase  the  capital  shall  be  listed  on  the  date  specified  in  the prospectus.

Muscat Depository and  Securities  Registration  Company  (MDSRC)  shall  complete  the preparation of shareholders' register before the end of the period prescribed above.

Article (36): Bond issuers shall file the listing application as per the terms specified in the prospectus in accordance with the format prescribed by CMA.

Article  (37):  Listing  of securities  in the  Market  shall  be  pursuant  to  the  decision of the General  Manager  of  MSM  which  shall  be  issued  within  one  week  from  receiving complete application and the decision shall also indicate the appropriate Market segment where the security would be listed.

Article  (38):   Terms  and  conditions  applicable  for  Omani  pubic  joint  stock  companies shall be adapted for investment funds that are obligated to list their securities.

Article (39):  Securities shall be listed in the Market as follows:

a. Regular Market: Shares of companies and units of investment funds shall be listed in this market, subject to the following terms and conditions:

1. The paid-up capital is not less than R.O. 2 million.

2. Shareholders' equity is not less than the paid-up capital.

3. The company has earned achieved net profits in the last two years.

4. The number of days during which the shares and units are traded are not less than 30 trading days in a year and annual turnover of the share or unit is not less than 5%.

Share of Omani public joint stock companies resulting from privatization processes shall be listed in this market. The provisions for transfer between market segments shall apply.

b. Parallel Market: Shares of companies and units of investment funds shall be listed in this market in case of the following:

1. Newly established joint stock companies and investment funds.

2. Joint stock companies and investment funds whose shareholders' equity is not less than 50% of the paid -up capital.

3.  Public joint stock companies and investment funds who fail to satisfy the requirements of listing in the Regular Market.

c. Third Market:  Shares of companies and units of investment funds shall be listed in this market in case of the following:

       1. Closed joint stock companies.

       2. Joint   stock   companies   and   investment   funds   whose   shareholders' equity is less

       than 50% of the paid-up capital.

 

        3.  Public  joint  stock  companies  and  investment  funds  who  fail  to  satisfy  the

        requirements of listing in the Regular Market

d. Bond Market: Bonds shall be listed in this market segment.

Article  (40):  Where  the  market  administration  notices  that  any  company  or  fund  is eligible  for  listing  in  a  higher  market  segment  or  ineligible  to  retain  its  position  in  the current  market  segment,  the  Market  shall  transfer  its  listing  to  the  appropriate  market segment.

 

Article (41): Non Omani issuers who are desirous of listing their securities in the market may file an application in the format prescribed by the Market.

Article  (42):  The  Market  may  conclude  cross  listing  agreements with  other  stock exchanges including terms and conditions for such listing without being restricted by the provisions of this Chapter.

Article (43):  Delisting may take place in the following cases:

a. Change of the legal form to another legal form that is not eligible for listing.

b. Merger or takeover.

c. Dissolution or liquidation

d. Maturity of the security

 

Article (44): All securities listed in the Market are tradable unless pledged or attached or blocked from trading.

Article (45):  The Board of Directors of CMA shall determine the weekly trading days. The Board of Director of MSM shall determine daily timings. These shall be announced one week before coming into effect.

Article  (46):  The  Director  General  shall  stop trading  in  the  market  in  the  event  of  any technical  failure  in  the  electronic  trading  system  affecting  at   least  one  third  of  all brokerage  companies.  He  may  make  up  for  such  stoppage  with  additional  time  after repairing the failure or start new trading session if such an adjustment would be unfair to brokers and market participants.

Article (47):  The Director General may extend or reduce the specified time of the trading session as per the rules approved by Board of Directors of the Market. All principles and measures  of  the  original  session  shall  apply  to  such  extended  sessions.  The extended periods shall also constitute a part and parcel of the trading session.

Article (48):  Access to the trading platform shall be limited to the staff of MSM, the staff of CMA and licensed brokers. The Director General shall determine the number of staff of the brokerage companies who shall have the right to access the trading platform.  Entry to the traders' arena may be allowed to official delegations, visitors, guests and students through approval by the Director General or his deputy.

Article (49):   Brokerages shall keep the usernames and passwords given to them by the Market  to  access  the  trading  system  and  take  the  necessary  measures  to  maintain  the secrecy of the same. Brokerages shall be responsible for orders and transactions executed through their usernames.

 

Article  (50):  The  Director  of  Operations  of  MSM  shall  have  the  powers  to  execute trading  measures  and  directives.  Brokers  shall  not  have  the  right  to  interfere  in  the powers of the Director of Operations or object his decisions during the trading sessions.

Article (51):   The Market  may temporarily suspend trading of any listed security if there is of information or rumor that may affect the price of the security or in case the company restructures its capital or splits its shares.

 

Trading of the securities of any company shall be suspended if the company is dissolved or liquidated.

Article  (52):    The  Director  General  may  increase  the  price  fluctuations  of  a  certain security  by  10%  over  the  original  percentage  at  the  same  trading  session  if  there  are orders  or  offers  that  exceed  the  applicable  ceiling  in  the  Market.  The  Market  shall announce  this  modification and  suspend  trading  in the  security  for  15  minutes  to  allow dealers to amend their orders.

 

Article (53): No person shall enter bid/ask orders with the intention of misleading market participants  that  there  is  active  market  for  one  security  or  more,  which  would  lead  to price  increase  or  fall.  Any  person  or  group  of  persons  may  not  conduct  a  series  of transactions on securities in order to manipulate the price.

 

Article (54):  A brokerage company may trade in securities in favour of a member of its Board  of  Directors,  its  managers,  their  spouses  and  relatives  up  to  first  degree.  It  may also deal in securities in favour of its accredited brokers and its staff provided that it fully and immediately discloses such relationships and dealings.

 

Article  (55):  Declared  dividends  shall  accrue  on  the  date  of the  general  meeting  which approved  such  dividends  or  any  other  date  determined  by  the  general  meeting.  In all cases dividends shall accrue to the holders at the end of working hours on the record date.

 

Article  (56):  The  buying  client  shall  be  considered  as  holder  of the  securities  from  the moment  of  execution  of  the  purchase  order.  Where the client  fails  to  discharge  his financial   obligations   during   the   settlement   period   the   broker   shall   deal  with   such securities in accordance with rules applicable in the market.

 

Article  (57):  The  broker  shall  charge  the  client  a  trading  commission  of  not  less  than 0.004 and  not  exceeding  0.0075  for  each  transaction  inclusive  of  the  market's  share which is 0.0015 of the transactions value.

 

 

Article (58):   Selling and purchasing of securities by brokerages shall only be executed on the basis of written or verbal authorization or any other method agreed upon between customers,   their   agents   or   their   legal   representatives   and   the   brokerage   company, provided that  that  such unwritten orders shall be made  in written down later and signed by the client or his authorized agent. Client's authorization shall not be absolute.

 

Article (59): Client's orders shall only be received by the broker the general manager of the brokerage or his/her equivalent.

 

Article (60): Orders given to the broker shall specify the conditions or limits of the client within  which  the  broker  can  act  on  his  behalf  in  accordance  with  the  form  issued  by CMA.

 

Article (61):  Upon receiving the authorization the  broker  shall  verify the  identity of the client and his capacity to trade.

 

Article (62):  The signature of the client on the authorization given to the broker shall be deemed  as  acknowledgment  of  the  validity  of  the  information  contained  therein.  The broker shall act within the terms and conditions of such authorization.

 

Article (63): The broker should maintain a telephone conversation recording machine to receive authorization by telephone. In case of any authorization received by a telephone which is not connected to telephone conversation recording machine, the broker shall be liable in  case a of any dispute with the client.

 

Article (64):   The brokerage company should block the securities it  wants to sell before sending the selling order. This excludes the shares registered under custodian's account.

 

Article (65): The Authorization System shall automatically block the securities purchased for clients of the brokerage company in favour of the brokerage company which made the purchase. The brokerage company shall lift  the block as per the agreement  shown in the authorization  order  unless  the  buyer  client  infringes  his  obligations  with  the  brokerage company.

 

Article (66):  The broker shall observe the priority of executing clients' orders as per their time  of  receipt.  The  broker  shall  be  responsible  for  the  accuracy  of  such  priority.  The broker  shall  execute  buy  and  sell  orders   in  the  nearest   trading   session  unless  the authorization provides otherwise.

 

Article (67):  a. The broker shall open a trading account in favour of the client and ensure that  the  client   has  an  account   with  Muscat   Depository  and  Securities   Registration Company.

 

 b. The broker shall endeavour to execute purchasing or selling orders in favour of his client   at  the  best   possible  price  at  the  time  of  executing  the  order  as  per  the authorization.

 

Article  (68):   a.  The purchasing  client  shall,  upon  the  execution  of  the  purchasing order by the broker, pay the value of the purchased securities and the commission to the broker as per the clearance and settlement rules applicable in the Market

a - The selling broker should pay the value of the sold securities to his client  as per the applicable clearance and settlement rules applicable in the Market.

 

 

Article  (69):  Companies  licensed  for  brokerage  may  provide  the  ability  to  trade  in  the Market, through the Internet.

 

Article  (70):  Brokerage  companies  desirous  of  providing  trading  through  the  internet shall  obtain  the  Market's  approval  by  filing  an  application  and  signing  the  relevant agreement on the form prescribed by the Market.

 

Article (71):  Brokerage companies desirous of providing this service shall:

1-   Install   and   maintain   an   order   management   system   as   per   the   technical specifications determined by the Market.

2-   Provide information protection system against hacking through the Internet.

3-   Provide  electronic  means  necessary  to  receive  and  register  clients'  order  safely and in consistence with the company's procedures.

4. Conduct surveillance of Internet trading operations.

5. Create technical  mechanism  to  ensure  that  client's  transactions  are  not executed without sufficient balance of funds or securities.

6. Set  out  written  disclosures  to  explain  the  steps  for  trading  through  the Internet.

7. Assign  the  compliance  officer  of  the  company  to  follows  up  clients' complaints regularly and ensure that they are resolved within a reasonable period.

8. Sign  contracts  with  its  clients  that  take into  account  the  following,  in addition  to  the  requirements  of  the  laws  that  regulates  Internet  based dealings in the Sultanate:

a. Adherence to "Know Your Customer" requirements.

b. Specifying responsibilities of the parties of the contract.

c.   Specifying the duration of the contract.

d. Specifying cases that require manual signature.

e. Providing alternative contact channels.

f. Specify cases that lead to the cancellation of clients' orders.

g.  That  each of the  contracting  parties  shall  comply with  local  laws,  irrespective  of the place where the order has been entered from.

h.   Disclose   all  risks   related   to   trading   through  the   Internet   and   investment   in securities.

i.  Any other requirements prescribed by the Market.

 

Article (72): Brokerages licensed to provide this service shall enable their clients to route their buy and sell orders to the electronic trading system.

 

Article   (73):   Orders   through   the   Internet   shall   be   subject   to   the   same   provisions regulating the ordinary orders.

 

Article (74):  Brokerages shall cancel the orders coming from clients through the Internet if the orders  infringe the  applicable directives  and regulations of the  Market  or  infringe the agreement  with the client  or are intended to create false impression of purchasing or selling orders. In such cases, the brokerages shall also inform their clients.

 

Article  (75):  The  Brokerage  Company shall  not  bear  any responsibility  for  such orders placed  through  the  internet  which  have  failed  to  reach  it  due  to  any reason.  The  client may use the available  alternative  methods to  have his  orders delivered to the brokerage company. The agreement between the client and the brokerage company shall provide for this condition.

 

Article (76):  The priority for execution of orders in the trading system shall be based on:

1^st - price

2^nd - time of entry

3^rd - type of order

Article (77):   The price shall determine the priority of executing orders.  Orders entered into  the  electronic  trading  system  shall  be  either  a  Limit  Order,  or  a  Market  Order. Priority shall be based on prices as per the following rules:

a-   Priority of buy orders shall be separate and independent from selling orders.

b-   Higher-price buy order shall take precedence over lower-price buy orders.

c-   Lower-price sell orders shall take precedence over higher-price sell orders.

d-   Best prices shall get priority in execution.

 

Article (78):   Time of entry of the order shall be subsequent  to the price in determining the precedence in the sequence of priorities as per the following rules:

a-   Once an order is entered, the system shall determine time and date of entry.

b-   Entry time of the order is the time upon which priority is determined.

c-   Orders carried  forward from previous day shall take priority over orders that  are entered  for  trading  during  the  pre-opening  session  or  during  the  continuous trading session if the price is the same.

d-   Any amendment in the information of an order entered into the system shall lead to a change in the time of entry of the order and its rank in the priority except in case of reduction in the quantity.

e. Where   an order is partially executed,   the remaining portion shall retain its priority.

Article (79):   All bids and offers shall be in units specified by the Board of Directors of the Market.

 

Types of orders:

1-   Limit Price Order: Order at specific execution price.

2-   Cross Order:  An order  to the same  broker  for the same securities,  asking to  buy and  sell  for  the  same  quantity.  This  order  shall  be  executed  directly  at  the  best price limits.

3-   Market  Order: Order which the client  accepts its  execution at  the current  market price.

 

4-   Market   To   Limit   Order:  An  order  without   specifying  the  price.   It   shall  be executed   at   the   best   available   price   (the   order   is   cancelled   if   there   is   no corresponding  order  at  the  time  it  was  sent).  In case  of  partial  execution  of  the order, the  bid/ask  price  for  the unexecuted portion shall  be  equal to  the price  of the executed part.

5-   Opening  Price  Order:  Order  sent  without  price  during  the  pre-opening  session. The  execution  price  shall  be  equal  to  the  opening  price.  Should  any  quantity remain unexecuted after the opening of the market it shall become a limit order at a price equal to the opening price.

6-   Stop  Order:  An  order  at  market  price  that  automatically  becomes  active  only when the price of the security reaches the specified trigger price.

7-   Stop   Limit   Order:   An   order   which   specifies   maximum/minimum   price   for execution (Limit  Price). It  shall be triggered automatically if the security reaches the specified Stop Limit Price.

8-   On 1   Limit Order: An order which has one tick priority over Limit Price Orders. It  can  be  sent  during  the  pre-opening  session  or  during  the  continuous  trading session.

9-   Fill and Kill (FAK) Market  Order: This is a market  price order. It  is executed at the opening of the market if it was sent during the pre-opening session. It shall be executed  directly  if  it  was  sent  during  the  continuous  trading  session  fully  or partially  depending  on  the  existence  of  one  or  more  corresponding  orders.  The order   shall   be   cancelled   if   no   matching   order   is   available   at   the   time   of transmission.   Any   unexecuted   quantity   of   the   order   shall   automatically   be cancelled.

 

 Article (81):   Validity of the orders entered into the electronic trading system shall be as follows:

1-   (Day): Valid for one day.

2-   Valid for immediate execution (Fill And Kill)

3-   Valid for a certain date (Good Till Date)

4-   Valid for one year (Sliding Validity).

 

Article (82): The broker may, in addition to the type and validity of order, specify:

1. Minimum limited for execution of the order.

2. Number of securities appearing in the order.

Article (83): The Brokers may cancel any order entered into the electronic trading system if  not  executed.  If  part  of  the  order  is  executed,  the  broker  may  cancel  the  unexecuted part.

 

Article  (84):  Trading  shall  take  place  through  the  electronic  trading  system  in  regular sessions as follows:

1-   Pre-opening session

2-   Opening session

3-   Continuous trading session

4-   Closing session

The  electronic  trading  system  shall  continue  in  operation  for  the  period  set  by  the Director General of the Market.

 

Article  (85):  a.  The Market  shall  hold  the  pre-opening  session on  every trading  day.  It shall run till the beginning of the continuous trading session. Unexecuted and valid orders of the previous day shall be carried forward to this session. Brokers shall, during the pre-opening   session,   undertake   preliminary   measures   including   entering,   amending,   or canceling orders and review the available data through the electronic trading system.

b.  During  the  pre-opening  session,  the  electronic  trading  system  shall  prioritize entered  selling  and  purchasing  orders  and  the  existing  orders  in  accordance  with applicable priority rules. No trading shall take place during this session. The System shall calculate the opening price for companies for which there are executable selling and purchasing orders.

c.   The   opening   price   shall   be   determined   during   the   pre-opening   session   in accordance with the following rules:

 1-   The  opening  price  is  the  price  which  would  lead  to  the  trading  of  the largest possible quantity of securities at the opening.

2-   In the event  that  there  is  more than one price  meeting this  condition,  the price which keeps the least quantity unexecuted shall be chosen.

 

3-   Where  more  than  one  price  achieves  the  same  results  in  terms  of  the traded  quantity  and  the  remaining  securities,  the  higher  price  shall  be chosen in case the remaining quantity is more on the demand side and the lesser price in case the remaining quantity is more on the supply side.

4-   The price that is nearest to the benchmark price.

 

Article (86):  a.  At the end of the opening session, selling and purchasing orders shall be executed at the opening price where this price is better than or equal to the prices specified  in  purchasing  and  selling  orders.  Unexecuted  orders  and  the  remaining quantities  of  the  partially  executed  orders  shall  be  transferred  to  the  continuous trading session.

b.  Entered  orders  which  were  not  fully  executed  in  the  opening  session  shall  be included  in the priorities schedule  in  accordance  with their  prices and the time they were  entered  into  the  system.  Orders  transferred  from  previous  days  shall  take precedence over those orders which were entered during the pre-opening stage in case prices are equal.

During  the  continuous  trading  session,  purchasing  and  selling  of  listed securities  shall  be  executed  through  entering  purchasing  or  selling  orders  followed  by automatic matching of corresponding orders.

 

Article (88):  Special orders shall be executed through TCS trading system. The Board of Directors of the  Market  shall  determine  the  number  of  securities  required  to  qualify  as such orders

 

Article (89): Special orders shall be allowed a flexibility of 15% from the previous day's closing price. The Director General may change this percentage as appropriate.

 

Article  (90):  Executed  special orders  may  be  split  through the  clearance  and  settlement entity  on  the  condition  that  one  party  to  the  contract  is  one  individual  person  or  one person  and  his  wife  and/or  his  parents  and/or  children  up  to  second  degree  or  his  sole commercial enterprise.

The  Broker  may  demand  the  announcement  of  the  existence  of a  special order (bid, ask) to other brokers through the Operations Department.

 

Article  (92):  The  company  may,  prior  to  calling  for  the  unpaid  capital,  coordinate  with the Market and MDSRC to create the mechanism for registration of payment and trading of its shares during capital call period.

 

Article  (93):  Following  a  decision  of  its  board  of  directors,  the  company  shall,  by registered mail send to their addresses in the shareholders' register, call upon shareholders who are yet to pay the outstanding capital, to do so, within thirty (30) days from the date of  sending  the  call.  The  company  shall  advertise  the  same  in  two  daily  newspapers  of Oman, one Arabic and one English.

 

Article (94): Where a shareholder defaults on payment despite calling upon him to do so, the company shall send him a warning  by registered mail to his address recorded in the shareholders' register to pay within 21 days of the date of the warning. The warning shall inform  the  defaulting  shareholder  that  his  shares  will  be  placed  for  sale  in  a  public auction  in  the  Market,  in  case  the  warning  period  elapses  without  payment  has  being made.

 

Article (95): Where the warning period mentioned in the above article passes without the shareholder  making the payment, the company shall publish an advertisement  at  its own expense once in two daily newspapers in one Arabic and one English indicating that the company  intends  to  sell  the  shares  owned  by  defaulting  shareholders  in  an  auction  ten days prior to the date of auction. The advertisement shall contain the date of the auction.

 

Article (96): The company, wishing to sell the shares of the defaulting shareholders in a public  auction  shall  submit  an  application  to  this  effect  to  the  Market.  The  application shall include the following documents:

a- A written statement showing that the company  has  taken all the  necessary  legal measures in this respect.

b-   Copies of the advertisements in which the company called upon the shareholders to pay the required unpaid capital.

c- Detailed  statement  approved  by the  company's  management  showing  the  names of  defaulting  shareholders  who  failed  to  pay  the  unpaid  capital,  the  number  of shares and their serial numbers.

 

Article  (97):  The  Market  shall  announce  the  date of the  auction three  (3)  working  days prior to the date of auction and the auction shall continue for five (5) days. Where all the shares  offered  in  the  auction  are  not  sold  within  the  specified  term,  the  auction  shall continue for another five (5) working days after the date of commencement and the same  trading session. If the shares are still not sold the company may request  for extension of the time.

 

Article (98): The sale of the auction shares shall be through only one brokerage company which shall be authorized by the concerned company to execute the selling process.

 

Article (99): The brokerage company executing the sale of the shares in a public auction shall place selling orders in the form of ordinary orders on the trading screen.

 

Article (100):  The  Broker  authorized to  execute the  auction shall observe the  following measures when presenting the selling of auction shares orders:

a - To  start  with offering the  highest  price allowed  by trading  measures  or  with the highest price recorded during the last fifteen 15 days.

b-   The prices of offers that  follow the first  offer shall be determined and put  up for auction sale in accordance with the auction method.

 

Article  (101):  The  brokerage  company  authorized  to  manage  the  auction  shares  selling process may purchase in favour of its clients or its own portfolio.

 

Article (102): The brokerage company shall issue a cheque with the net value of the sales in the  name of the company together  with the detailed  selling  invoice,  the  quantity and the net value after commission.

 

Article (103):  The company shall take precedence over  all the shareholder's creditors  in recovering  its  unpaid  dues  from  the  value  of  the  sold  shares  in  the  public  auction  in addition to the accrued interest and expenses. It shall pay the balance to the shareholder. If the selling proceeds were inadequate to pay all the company's dues, it may recourse to the court to recover the remaining amount from the private money of the shareholder.

 

Article (104): The average price of the total shares sold in the auction shall appear in the company's  register  in  calculating  the  share-selling  price  in  order  to  make  the  final settlement with the shareholder after deducting all related expenses.

 

Article (105): Selling and buying bonds shall only be on the trading platform. Bonds may not be traded in any other place without a decision from the Board of Directors of CMA.

 

Article (106): Bonds unit,  for the purpose of trading, shall consist  of one bond based on its  face  value  in  every  issue.  A  transaction  executed  shall  consist  of  one  unit  and  its multiples.  A  broker  shall  be  obligated  to  buy  or  sell  at  least  one  bond  (one  unit).  The buyer shall pay the price of the purchased units as per its market value in addition to the accruing interest up to the date of purchase.

 

Article (107):  Interest shall accrue to the bond bearer on the date of maturity.

 

Article   (108):   Public   auction   measures   shall  apply  for   determining   bond   prices   in accordance with supply and demand on the issue and its instruments without any limit for daily increase or fall and without any limit on the number of bonds included in one order.

 

 

Article (109):  Securities may be sold as per directions in final judgments or orders by the competent authorities in accordance with the provisions of the law against debtors.

 

Article (110): To enforce the selling process in accordance with the previous Article the creditor or his agent shall present the judgment or the order of the competent authority in accordance   with  the   law   together   with  any  documents   or   identification  documents required by the market.

 

Article (111): Where a broker is not assigned by the judgment or order to execute the sale process the Market shall appoint a broker to do so.

 

Article (112):   a. The broker who executed the selling process shall issue a cheque at the  net  value  of  the  sold  securities  in  the  name  of  the  entity that  issued  the  selling order. A selling invoice showing the number of securities sold, their market price and the  net  amount  after  deducting  the  required  commissions  shall  be  attached  with  the cheque.

b.   The   broker  shall  hand  over  the  cheque  and  the  sale   invoice  to  the  Market management upon the completion of the selling process.

c. The Market  shall  hand over  the  cheque and  the  selling  invoice  to  the entity that ordered the sale, after recording his signature in the register.

d. Securities  selling  processes  which  are  executed  by  virtue  of  final  judgment  or order  of  competent  authority  in  accordance  with  the  law  shall  be  recorded  in  a special register with in the Market.

 

Pursuant to the Capital Market Law promulgated by Royal Decree No. 80/98; and Royal Decree No. 82/98 establishing Muscat Depository and Securities Registration Company; and Royal Decree No. 72/2010 amending the name of Name of Muscat Depository and Securities Registration Company; and The Executive Regulations of the Capital Market Law issued by Ministerial Decision No.1/2009; and The Resolution based on decision of the Board of Directors of the Capital Market Authority on 24th October 2010 In the interest of the publicIt has been decided

 

Article (1): The provisions of the attached regulation shall be applicable on clearance and

settlement.

Article (2): Anything that violates this decision or contradicts it provisions shall be repealed.

Article (3): This decision shall be published in the Official Gazette and shall come into force

Issued on : 11th Shaban 1432H

Corresponding to: 13th July 2011

Saad Mohammed Said Al Mardhouf Al Saadi

Chairman of the Capital Market Authority

http://msm2.gov.om/MSMWEB/MSMDOCS/downloads/en_1349677227901_Clearance%20and%20settlement%20regulation_12Oct2011.pdf 

* [Note: This Decree was published in the 15 November 1998 issue of the Official Gazette and
         therefore has an effective date of 15 January 1999.]

Words and expressions defined in this Law shall have the following meanings, unless the context otherwise requires:

The Minister The Minister of Commerce and Industry

The Chairman The Chairman of the Authority's Board of Directors

The Executive President The Executive President of the Authority

The Authority The Capital Market Authority.

The Market Muscat Securities Market

The General Meeting The General Meeting of Muscat Securities Market

Person Any natural or juristic person

Member A juristic person who is a member of the Market pursuant to the provisions of this Law.

Broker A juristic person who is licensed to exercise brokerage activities in the Market.

Broker’s Agent A person who represents a Broker in giving, selling and purchasing orders under the supervision and responsibility of that Broker.

Securities Shares and bonds issued by joint stock companies and the bonds issued by the Government and its Public Authorities, treasury bonds and bills and other securities negotiable in the Market.

Dealings in Securities Transactions of purchasing and selling Securities directly or through a Broker, the transfer of ownership of such Securities and the documentation of ownership.

The Floor The place in the building of the Market which is designated for the purchasing and selling of Securities.

The Primary Market The Market in which Securities are offered to the public and issued pursuant to the applicable rules, regulations, guidelines and common practices.

The Secondary Market The Market in which Securities are purchased or sold directly or through Brokers and where the exchange and transfer of their ownership takes place on the Floor, in the Brokers’ office or the Market’s offices.

The Regular Market That section of the Secondary Market where dealings on the Floor is regulated in respect of companies’ shares subject to special listing condition as specified by Board of The Authority.

The Parallel Market That section of the Secondary Market where dealing on the Floor is regulated in respect of companies’ subject to simplified listing requirement specified for such Market, in order to facilitate the provision of early liquidity for the Securities listed therein prior to their listing in the Regular Market.

The Third Market That section of the Secondary market where off-Floor dealings takes place at the Broker’s office in respect of the companies’ shares to which the specific listing condition for trading on the Floor do not apply, or where ownership of Securities is transferred off-Floor without a Broker.

Public Subscription An open invitation to the public to subscribe for the shares of joint stock companies at their incorporation or upon the increase the share capital of an existing company in accordance with the conditions and provisions specified in the prospectus of such company as ratified by the Authority.

Private Subscription An invitation addressed to a specific category of subscribers or persons to subscribe for the shares of an open joint stock at its incorporation or upon the increase of the company’s share capital pursuant to the conditions and requirement specified by the Authority.

Without prejudice to the provisions of the Commercial Companies Law No. 4/74 referred to above, which require joint stock companies to obtain a licence for their establishment from the Directorate General of Commerce, every joint stock company that wishes to issue Securities must obtain the approval of the Authority, prior to obtaining the licence referred to above. This shall take place without prejudice to any other provision of applicable laws. The Regulations shall specify the information and documents to be attached to the application for such approval.

Article 3*

No Securities of any joint stock company may be offered for public or private subscription except in accordance with a prospectus approved by the Authority. The summary of such prospectus shall be published in two daily newspapers one of which, at least, must be in Arabic. The prospectus must be made in accordance with the forms specified by the Authority. The prospectus must include all financial statements and information relating to the issuing company. The Regulations shall specify the information  required for the issue of other shares and Securities. Any omission or avoidance of any material information or the inclusion of incorrect statements or information shall be the responsibility of the entity preparing the prospectus.

*Amended by Royal Decree 18/2002

Without prejudice to the provisions of the Commercial Companies Law, the Authority may object to the assessment of shares in kind, either upon incorporation, merger or transformation. The Authority may refer such matter to one or more experts for an  assessment. The parties concerned may file a complaint against the assessment before the Grievance Committee pursuant to the conditions and procedures specified by the Regulations.

Each company offering Securities for Public Subscription must, on its own responsibility, submit to the Authority annual, half year and quarterly reports on its activities and the results of its business, which shall include statements with regard to the sound financial position of the company. The company shall publish a comprehensive summary of these reports in two daily newspapers, one of which, at least, must be in Arabic.

Balance sheets and other financial statements shall be prepared in accordance with recognized accounting principles and the Accounting and Auditing Law issued by Royal Decree 77/86. Reports shall be submitted to the Authority within the period to be specified for this purpose.

The Authority may inspect the documents referred to above, or assign a specialized body to carry out such inspection. The Authority shall notify the company of its comments, and may request that such documents are reconsidered following the conclusion of such inspection. Should the company fail to respond to such requests, then it shall be responsible for the costs for the publication of the Authority’s comments and the requested amendments.

Every company which faces unexpected material circumstances that may affect its activities or its financial position must reveal the same promptly to the Authority, who may publish, at the expense of the company, a comprehensive summary of the same if deemed appropriate. The Authority may request the said company to publish such information in daily newspapers. Should the company fail to respond to such request, then the Authority may announce such information in the appropriate media at the expense of the company.

The company and the auditors must provide the Authority with all information requested, including all statements and documents needed in order to verify statements provided in the prospectus, the regular reports and the financial statements and schedules of the company. In the event of any change or amendment to the information specified in the prospectus, such changes must be notified to the Authority within the period specified in this respect. The execution of such amendment shall be subject to the Authority’s approval.

(a) Any persons who owns individually or together with his minor children shares amounting to 10% or more of the shares of any joint stock company, must promptly notify the Authority of the same in writing and shall inform the Authority of any dealings or transactions carried out which lead to the increase of such percentage.

(b) No single person or related persons up to second of kin shall hold 25% or more of the shares of a joint stock company whose shares are offered for public subscription, save by a prior approval of the Executive President or an acting person thereof. Where a violation occurs the transaction shall be deemed null and void. The Board of Directors of the Authority shall specify the terms and condition of such holding.

(c) Should the subject matter of domination or ownership be a bank or establishment which exercises banking business, then the prior consent of the Central Bank of Oman must be obtained in accordance with the provisions of the Banking Law.

*Amended by Royal Decree 18/2002

The Authority’s Board of Directors may, upon material reasons raised by shareholders who own at least 5% of the company’s shares, suspend the resolutions of the General Meetings which are made in favour of a certain category of shareholders or against a certain category of shareholders, or in the interest of the members of the Board of Directors or others.

The parties concerned may request the Appeals Committee specified in this Law within 15 days from the date on which the resolution of suspension was passed, to invalidate the resolutions made by the General Assembly. The Committee’s decision shall in such case be final. Should such period lapse without any measures being taken thereon, then the decision of suspension shall be null and void.

 

Securities shall be registered and traded in a market called the Muscat Securities Market. The Market shall enjoy juristic personality and its head office shall be in Muscat. The Market shall report to the Authority.

Article 10*

Any body issuing securities for trading shall be listed on the market; the application for listing thereon shall be submitted within one month from the date of registration in the Commercial Register. The listing shall be made by a decision by the Director General of the Market in accordance with rules set by the Board of Directors of the Authority.

Trading in the market shall be restricted to Omani Securities. Securities issued in GCC member states or fore  foreign countries may be listed by decision from the Broad of Directors of the Authority.

*Amended by Royal Decree 18/2002

The Market shall be managed and organized by a Board of Directors, which shall be authorized to administer its business and take the necessary action to achieve the objectives for which the Market was established within the framework of the general policy of the Authority. The Board of Directors shall, in particularly, undertake the following:  

1. Approve the Market’s organizational structure and specify the departments and sections etc.

2. Prepare the regulations, rules and guidelines required for the organization of the Market and refer the same to the Authority’s Board of Directors for approval.

3. Prepare the estimated annual balance sheet in respect of the Market’s revenue and expenditure prior to the commencement of the financial year. Such balance sheet shall not be valid unless it is approved by the Authority’s Board of Directors.

4. Exercise any other competencies specified by Regulations

 

Article 12*

The Board of Directors of the Market shall be formed as follows:

2            Director General of the Market Member

3         Representative of the Authority Member

4         Representative of the Central Bank of Oman Member

5          Four members to be elected by the general meeting of the Market, one representing brokerage firms, another representing shareholders each one of them owns less than 5 thousand shares and two representing companies whose securities are traded on the Market.

The Board of Directors of the Authority shall issue a resolution forming the Board of Directors of the Market for a term of three years. The membership of the Directors may be renewed for other terms, except for those specified in clause 4 whose terms shall be renewed once.

The Board of Directors of the Authority shall issue a resolution appointing the Director General of the Market and the Chairman from among the members specified above, no single person shall hold the two offices.

The Board of Directors of the Authority shall issue internal regulations specifying the functions and competence of the Director General of the Market and the Chairman of the Board of Directors, procedures for the convention of the Market’s board, place of meeting and quorum, the method of resolution making, remuneration of board members and other regulatory measures.

*Amended by Royal Decree 18/2002

 Article 13*

The General Assembly of the Market shall comprise the public bodies and joint stock companies whose securities are traded at the Market, licensed companies operating in the field of securities and the Central Bank of Oman. The General Assembly is authorized to monitor the general situation  of the Market, to make suggestions to ensure the efficiency of the Market, to elect the members of the board directors specified in paragraph (4) above and to appoint the auditors of the Market. The Internal Regulations shall specify the procedures relating to how the General Assembly is called to convene, the date of the meeting, the quorum and validity of the meeting and discussions, as well as the manner of passing of resolutions. The Regulations shall be issued by a resolution passed by the Authority’s Board of Directors.

*Amended by Royal Decree 18/2002

1.    Funds allotted by the State.

2.    Annual subscription fee paid by the members.

3.    Commissions received by the Market for sale and purchase transactions.

4.    Grants and donations obtained by the Market from any party and approved by the
       Authority’s Board of Directors provided that they are of Omani origin.

5.    Any other sources specified by the Law.

Dealing in Securities in Oman is confined to dealing on the Floor. Any dealing taking place outside the Floor is considered null and void unless the Authority’s Board of Directors resolves otherwise pursuant to its Internal Regulations and Guidelines.

The Market shall provide the Authority with all particulars of listed securities and shall provide the Authority with regular trading reports.

Article 17*

Dealing in Securities listed in the Market shall take place through one of the licensed companies, otherwise such dealings shall be null and void. The relevant company shall ensure that the transaction through which the dealing takes place is valid.

The shares purchased by a brokers for a customer and the values of which has not been settled, may be suspended from trading on request from the broker pursuant to the rules issued by the Board of Directors in the Authority.

*Amended by Royal Decree 18/2002

Offers of and demands for transactions which contradict the provisions of the Law or which are made of unjustifiable prices may, upon a decision by the Director General of the Market, be suspended. The Director General is also empowered to cancel any  transactions which contradict the provisions of the Law and the decisions enforcing the same.

The Board of Directors may, as long as it is deemed appropriate and depending on the Market’s circumstances, specify a percentage of the opening price for that day to be applied as a maximum limit for the increase or decrease in the securities prices  during a certain daily trading session. Such percentage shall depend on the duration which the Authority’s Board of Directors shall consider necessary. The Authority’s Board of Directors may amend, suspend or cancel such percentage as it deems appropriate priate.

The Market shall charge a commission for transactions at the Market and the transfer of ownership of securities which are exempted from trading on the Floor. Such commission shall be calculated in proportion to the market value of such securities to be specified by the Board of Directors, provided that commission shall not exceed 1% of such value. The commission shall be collected equally from the seller and the purchaser pursuant to the rules specified by the Authority’s Board of Directors and in accordance with the guidelines issued by the Board.

 

The management of the Market shall enter the transactions on the date on which the brokerage companies have performed the same, and the issuing party shall be notified of such entries. The Regulations of the Law shall specify the provisions relating  to the organisation and registration of deposit, clearance and settlement operations.

Rights and personal liabilities between the seller and purchaser shall be established in respect of the Securities which are traded in the Market, on the date of the contract of sale as documented at the Market.

The ownership of shares shall be transferred by recording the same in the issuing body’s registers and entering them in the shareholders register and indicating that they have been transferred. Registration of transfer shall take place free of charge within three days from the date of receipt of necessary documents thereof. The issuing entity may not collect any amounts for the issue o share certificates. The registration of ownership of shares shall take place unconditionally expect in the following cases:

1.      If the securities were mortgaged or pledged.

       2.  If the share certificate was lost or damaged.

3.      If the sale was in contravention of rules and regulations relating to ownership of Securities by non-Omanis.

The issuing entries or any of their staff may not disclose the names or any statements of confidential nature relating to shareholders or transactions.

The Authority may establish an office for the deposit and registration of Securities to carry out the tasks specified in the article above, in addition to any other responsibilities granted to it for the management of the shareholders’ business and accounts. The Regulations shall specify the manner in which such office is to be established, its duties and the deposit and registration fees. A company for the deposit and registration of securities may be established in accordance with a Royal Decree. Such company may carry out the tasks of the office referred to above in accordance with the stipulations and provisions of such Royal Decree.

 

 

Information on dealings shall be published on a daily basis through a daily bulletin prepared by the Market. The Market shall also prepare a monthly bulletin to include a statement on Securities which have been registered during that month, the total  of monthly dealings in various areas and a comparison with the previous month. The monthly circular shall also set out all indicators relating to trading activities in the Market.

 

Article 25*

Companies operating in the field of Securities are those companies whose objectives are confined to the engagement of one or more of the following activities as well as the banks which are engaged in such activities:

(a) Promotion and underwriting of Securities or financing of investment in Securities.

(b) Participation in the establishment or in increasing of the capital of companies was using Securities.

(c) Depositing, clearance and settlement of Securities transactions.

(d) The establishment and management of Securities portfolio and investment funds.

(e) Brokerage in Securities.

(f) Management of trust accounts and custodianship of securities.

Other activities relating to Securities may be added by resolution by Authority’s Board. Applications to establish such companies shall be addressed to the Ministry of Commerce and Industry accompanied by the Authority’s approval.

The Regulations shall set out the procedures and conditions for the establishment of these companies, the activities included in their business and prohibited activities.

Activities set out in the previous article may not be exercised prior to obtaining a licence from the Authority and registration in the register established for this purpose. The Authority shall make its decision in relation to an application for a licence within one month from the date of submission of the required documents. In the event of a refusal the decision must be justified. A complaint may be made to the Appeals Committee referred to in this Law within 15 days from the date of receipt of the decision. The Regulations shall specify the conditions and procedures for the granting of such licence and the relevant bank guarantee.

 

The following condition must be prior to the issue of the licence referred to in the pervious article:

1.    The applicant must be a commercial company (with the exception of joint liability companies).

2.    The objective of the company with the exception of banks must be confined to the practice of one or more of the activities set out in Article (25) of this Law.

3.    The issued capital of the company and the paid up capital upon incorporation must be not be less than the minimum amount specified in the Regulations depending on the type and objectives of the Company.

4.    The managers of the company must have the experience and efficiency required for business of the company in the manner to be specified by a resolution made by the Board of Authority.

5.    Insurance must be obtained the value and general conditions of which shall be specified by a decision made by the Board of Authority.

6.    None of the founders, directors, or Board members must have been convicted during the five years proceeding the date of application of a crime or a felony relating to honour or any of the offences set out in the Commercial Companies Law or the Commercial Code or been declared bankrupt unless the person concerned has been rehabilitated.

The Authority shall register the licenced companies to practice in the area of Securities with the activities to be practiced. Such registration shall be subject to payment of a fee and an annual subscription to be specified in the Regulations.

A company which practises in the area of Securities shall submit the information, statements and statistics required by the Market or the Authority within a specified period. The management of the Authority may authorize a party to verify the accuracy of the information and statements presented. No company may decide to suspend its activities or liquidate its operations without the approval of the Board of Directors of the Authority after ensuring that the company has fulfilled all its obligations pursuant to the conditions and procedures specified by the Authority’s Board of Directors.

The Board of Directors of the Authority shall resolve to cancel the licence referred to in Article26 above, in the following cases:-

(a)    If one of the licencing conditions is not met.

(b)    If a final decision is made by the Disciplinary Committee to de-register
        the company

(c)    If the company has failed to settle the specified fees

(d)    If the capital or the bank guarantee is decreased to a lower amount than the
        specified limit and that deficit is not covered within the period specified
        by the Board.

(e)    If the company has significantly violated any of the duties and obligation specified
        in the Law or the Regulations.

The Board of Authority may, in the event of the occurrence of risk that may threaten the stability of the capital market or the interests of the Shareholders in the company or the parties dealing with the company, take any of the following measures:

(a)    Caution the company.

(b)    Prevent the company from practising all or some of the licensed activities.

(c)    Request the Chairman of the company’s board of directors to convene a board meeting to discuss any violations attributed to the company so that necessary action is taken to remedy the same. The meeting of the board of directors shall be attended in this case by one or more representatives of the Authority.

(d)    Appoint an observer member to the board of directors of the relevant company for a period specified by the Authority’s Board of Directors. Such member shall be entitled to take part in the discussions of the board and express his views in relation to the resolutions made.

(e)    Dissolve the board of directors and appoint managing director to temporarily manage the company until a new board of directors is elected.

(f)    Oblige the defaulting company to increase the value of the paid bank guarantee.

Complaints against the resolution made pursuant to the provisions of Article 30 and 31 before the Appeals Committee shall be made within 15 days from date on which the party concerned was notified of such resolution or such resolution has come to the knowledge of the party concerned.

Article 32*

Companies operating in the field of securities shall form an association or a guild to ensure the adherence to justice, integrity and efficiency in practising brokerage business. Such association or guild shall establish a fund to protect the interests of investors who deal with Securities or stocks. The decision to establish the association or the guild must specify the provisions and procedures relating to the establishment of the association and the basis for the management of the fund, the limits of coverage, the value of shareholding  of each member and the penalties which may be imposed on members pursuant to the provisions and procedures specified in the Regulations.

*Amended by Royal Decree 18/2002

Funds for the investment of savings in Securities may be established within the limits and pursuant to the conditions set out in the Regulations. The investment fund must take the form of a joint stock company with a capital in cash. One third of the  board of directors of the fund may be persons other than shareholders or parties dealing with it or being linked to it or having an interest in it or managing it.

The Articles of Association of a fund shall specify the relation between the capital paid to the company which establishes such fund and the monies of investors in the fund, provided that such relation may not exceed what the Regulations specify in t his respect. Against such monies, the fund shall issue securities in the form of investment units, the holders of which shall participate in the return of the investments of the fund. Subscription in such units shall take place through registered banks. The Board of Directors of the Authority shall set out the rules and regulations for the issue of such units and the return for their value, the statements to be included therein and the rules of their registration and trading in the Market.

The prospectuses relating to subscription in investment units which are offered for public subscription by the investment funds must contain the following additional information:

1.  The investment policy to be followed.

2.  The manner of distribution of annual profits and the method of dealing with capital profits.

3.  The name of the entity who will undertake the management of the fund and a comprehensive summary of its previous activities.

4.  The method of regular evaluation of the fund’s and assets and the procedures for the return of the value of the investment bonds.

The Securities in which the fund invests its monies shall be deposited with the Depository and Registration of Securities Office or any of the banks registered in Oman, provided that such bank must not be an owner or shareholder in the company which  owns such fund or the company which undertakes its management and provided that the fund must submit to the Authority a statement on these Securities approved by the bank on the form designated by the Authority’s Board of Directors.

The Executive President must be notified of the resolutions made for the appointment of the members of the board of directors, managers and authorised officials responsible for the general management of the fund and all information relating thereto, within thirty days from the date of the passing of the said resolutions. Such notification shall be made on the form designated by the Authority for this purpose.

The Authority’s Board of Directors may, for the purpose of protecting the investors’ monies, issue a reasoned resolution to dismiss any of the members of the board of directors or the directors referred to above. The party concerned may within 60 days from the receipt of such resolution file a complaint before the Appeals Committee previously referred to in this Law.

The fund shall authorise an entity with expertise in the management of investment funds to manage all activities of the fund. Such body shall be called the “Investment Manager”.

The Investment Fund shall enter into a management contract with the Investment Manager. The Fund shall submit a copy of that contract to the Authority prior to execution of the same in order to verify that the provisions of that contract are consistent with the Law and the decisions issued for its execution. The Authority shall within 15 days from the date of notification inform the Fund of its opinion with regard to the contract.

The Investment Manager is prohibited to:

1.    carry on activities which the Fund it manages is prohibited to carry on.

2.    use the Fund’s money for the formation of new companies or for the purchase of Securities of companies that are under liquidation or undergoing bankruptcy.

3.    obtain personal gain for itself, its management or employees from the operation it caries on.

4.    have an interest of any kind in the companies with whose Securities it deals for the account of the fund it manages.

5.    Purchase investment units of the funds it manages. The same applies to the employees of the Investment Manger.

6.    Obtain loans from a third party unless it is allowed to do so within the limits specified in the Contract.

7.    To invest the money of the fund in the units of another fund which it also manages.

8.    To announce or publish any incorrect statements or information.

9.    To carry on operations aimed at increasing the brokerage commission

Commercial banks and investment companies whose capital is not less than RO. 5 million, may establish investment funds aiming to invest savings in Securities, upon the approval of the Authority and pursuant to the rules and conditions specified by the Regulations and in co-ordination with the Central Bank of Oman, if the establishing entity is a bank.

Such banks and investment companies may dispose of such accounts pursuant to specified guidelines issued by the Authority. The banks or entities that establishes such fund shall maintain the confidentiality of the information related thereto. The monies of Fund shall not be included in the actual accounts of the banks or the companies, which establish them. Revenue realised from them shall not be entered into the accounts of such entities and shall not be affected by liquidation in the event of bankruptcy.

The articles of Association of the Fund and the regulations issued by the Authority shall specify the relation, which governs the parties therein, provided that they shall include the following statements:

1.    The investment policy to be followed.

2.    The manner of distribution of annual profits and the method of dealing with capital profits.

3.    The name of the body that will undertake the management of the Fund and a comprehensive summary of its previous activities.

4.    The method of regular evaluation of the Fund’s assets and the procedures for the return of the value of the investment units.

 

The entity establishing the fund shall submit to the Authority a statement on the investment units which the fund has issued, on the form designated by the Authority for this purpose. Investment units issued by the Funds of banks or investment companies may not be listed or traded in the Securities Market.

The Fund shall be managed by a committee of investors or others provided that the chairman of the committee must be an Omani and provided that the number of Omani members must not be less than the proportion of their shareholdings. The regulations issued by the Board of Directors of the Authority shall specify the procedures for the formation of the committee and the methods for its operation. The Executive President shall be informed of resolutions made for the appointment of the Committee members, and the managers responsible for the public administration of the fund’s activities.

The Board of Directors of the Authority may, in order to preserve the monies of the investors in the fund, issue a resolution to dismiss any of the members of the committee and the managers referred to above. The party concerned may file a complaint before the Appeals Committee within 30 days from the date of notification thereof. The resolution of the Committee in this respect shall be final.

The percentage of investment in the Investment Funds shall be in accordance with the provisions of the Executive Regulation.  These Funds shall not be subject to the Foreign Capital Investment Law and shall, for the sake of taxation, be treated as companies fully owned by Omani citizens.  

 

 

 

A public authority shall be established and shall be named the Capital Market Authority. Its head office shall be located in Muscat and it shall report to the Minister of Commerce and Industry.

The Authority shall enjoy juristic personality, financial and administrative independence and shall be qualified to dispose of its funds and manage its business and it shall carry on its activities in accordance with good commercial principles. The Authority shall be exempted from all taxes and fees.

1.       organise, licence and monitor the issue and trading of Securities.

2.       Supervise the operation of the Muscat Securities Market.

3.       supervise all companies operating in the Field of Securities.

The Regulations shall set out the conditions and provisions relating to the enforcement of these powers.

The objects of the Authority are as follows:

1.    To upgrade the efficiency of the Capital Market and protect the investors from unjust and unsound practices.

2.    To pave the way for the investment of savings and monies in Securities in the interest of the national economy.

3.    To organise and monitor the issue of Securities in the Primary Market and specify the requirements for prospectuses upon the offer of Securities for public subscription.

4.    To facilitate and accelerate the process of liquidating the monies invested in Securities ensure the interaction of supply and demand in order to determine the prices of such Securities and protect the interests of small investors by means of establishing sound and just principles of dealings between various categories of investors.

5.    To collect information and statistics on Securities which are being traded and publish reports thereon.

6.    To carry out studies and submit proposals to the authorities concerned with regard to the applicable laws and their amendment as required by the development of the Securities Market.

7.    To liaise with securities markets abroad for the purpose of exchanging information and expertise to keep up with the progress in trading methods in such markets, assist in the development of Omani Securities Market and join appropriate Arab and international organisations and associations.

8.    To organise and supervise training courses for the Authority’s staff or the Securities Market’s staff and including future staff.

9.    To establish the rules of the professional conduct, self-regulation and discipline for Brokers and those dealing with Securities and promotion and training of the Brokers and other staff at the Market with the aim of enhancing their knowledge and efficiency.

Article 50*

The Authority shall be managed and organsied by Board of Directors who shall run its business and take the measures necessary to achieve the objects for which the Authority was established and in particular the following:

1.    Set out the policy which the Authority shall follow in the exercise of its authorities within the framework of the financial and economic policy of the State.

2.    Pass to the government bodies concerned all matters relating to the development of Market and protection of the investor’s monies.

3.    Approve the regulations which regulate the activities of the Authority and the Securities Market, without being bound by government systems, whether in respect of the organisational structure, staff or administrative and financial matters, rules and regulations or the like. The regulations referred to above shall be made by Ministerial Decision.

4.    Suspend the dealing in any Security listed at the Market for the period deemed appropriate and empower the Executive President to do so.

5.    Suspend the activities of the Market, if necessary, for a period not exceeding one week, during which dealing in Securities in the Market shall be prohibited. Should the public interest however, require that the activities of the Market be suspended for longer than a week, then such suspension shall be made upon a resolution by the Cabinet of Minister’s in accordance with recommendation of the Authority’s Board of Directors.

6.    Ratify the estimated annual budget of the Authority prior to the commencement of the fiscal year in coordination with the Ministry of Finance.

7.    Specify the requirements relating to the prospectus for the issue of the Securities in the primary Market.

8.    Specify the conditions for the listing of Securities in the Regular Market or Parallel Market or any other Secondary Market approved by the Board of Directors of the Authority for the trading of securities.

9.    Ratify the guidelines for dealing in Securities in the Secondary Market.

10.    Set out rules and conditions for disclosure of circumstances or information that may have an impact on the activities or financial positions of securities issuing bodies and companies operating in the area of securities and executive managements thereof, and any change deemed by the Board of Directors of the Authority to have and impact on the value of the security.

11.    Set out the guidelines for the procedures of clearance and settlement between the Brokers in the Market on the one hand and between the Brokers, the Market and the public on the other hand.

12.    License the Brokers and specify their number, the nature of their activities, the number of their agents and their fees.

13.    Specify the commission charged by the Market for transactions and the transfer of ownership of Securities.

14.    Specify the subscription fees for members of the Market, the prospectus fees and the annual fees for registration of Securities, brokerage fees and charges to be paid for the services provided by the Authority and the Market.

15.    Take out loans specify their volumes and conditions relating thereto after obtaining approval from the Ministry of Finance.

16.    Exercise any other powers specified by the Regulations.

*Amended by Royal Decree 18/2002

Article 51*

Any member who refrains from listing its securities in the prescribed Market for a period of one month, shall be liable to pay a sum of not less than RO 2,000/- and not more than RO 5,000/-. Should such member fail to register its Securities, the Board may issue  a resolution to suspend dealings in its Securities.

*Amended by Royal Decree 18/2002

The Board of Directors of the Authority shall be formed of:

1.    The Minister           Chairman

2.    A representative of the Ministry of National Economy,  whose grade should be not less than Under Secretary, to be nominated by the competent Minister          Vice-Chairman

3.    The Executive President of the Authority Member

4.    The Director General of Muscat Securities Market          Member

5     The Director General of Commerce at the Ministry of Commerce & Industry          Member

6    A representative of the Central Bank of Oman, whose grade may not be below a Director General or equivalent, to be nominated by the Bank. Three members elected by the Minister from among a list of six names nominated by the Board of Directors of the Oman Chamber of Commerce & Industry, provided that commercial banks, insurance companies and public joint stock companies in other sectors shall be daily represented. The Vice-Chairman shall act for the Chairman in the Chairman’s absence.

The Executive President of the Authority shall be appointed by Royal Decree and shall be exclusively devoted to his work in this position. The Authority’s Board of Directors may empower the Executive President with any of its authorities other than the preparation of guidelines in relation to dealings in Securities in the secondary market, the issue of regulations relating to the activities of the Authority and the Muscat Securities Market and the specification of fees and commissions. The internal r nal regulations of the Authority shall specify his salary, remunerations, allowances and compensations and other rights and duties relating to him.

The Executive President shall undertake the execution of the policy of the Board of Directors and the resolutions passed by it. He shall be responsible for the management of the Authority pursuant to the internal regulations and shall represent the Authority before the law and third parties.

The Authority shall have an independent budget. The financial year shall commence on the first day of January and end on the thirty first day of December of every year provided that the first financial year shall commence with effect from the date of  enforcement of this Law and end on the last day of December of the following year. The Authority shall have an independent account in which its surplus or revenue shall be deposited after setting aside all capital, current and other expenditure. Such dep h deposit shall be called ‘General Surplus’ and shall be utilised to develop the business of the Authority pursuant to the rules established by the Board of Directors of the Authority.

The revenue of the Authority shall be made up of the following:

1.       Funds allotted by the State.

2.       Fees for the approval of the Securities prospectuses.

3.       Fees for the licensing of companies working in the field of Securities.

4.       Fees for the listing of Securities.

5.       Annual fees for the practicing of Brokerage business.

6.       Fees for services provided by the Authority.

7.       Financial penalties imposed for infringements of this Law.

8.       Subscription fees for periodical issued by the Authority.

9.       Grants and donations obtained by the Authority from any party and approved by the Authority’s Board of Directors, provided that the donations are of Omani origin.

10.    Revenue from investment of the Authority’s money.

11.    Loans obtained by the Authority.

12.    The Muscat Security Market’s annual budget surplus

The funds of the Authority are public funds which enjoy the rights of the Public Treasury of Oman. They shall also enjoy privileges and priorities over the monies of the Authority`s debtors. The Authority may recover such monies and rights pursuant to the procedures by which Government monies are collected and shall have priority over other debts and rights of third party. Notices of the Authority to various Government offices and to the Authority`s debtors and their agents shall be treated as official Government notices. The claims, demands and executive and administrative procedures of the Authority shall be considered urgently by the Commercial Court, administrative departments and committees in the Sultanate. Judgments made in favor of the Authority shall also have the benefit of urgency in enforcement.

The accounts of the Authority shall be audited by a licenced auditor to be appointed by the Board, who will also specify his remuneration after having obtained the approval of the State’s financial control department.

The staff of the Authority and the Market whose names or posts are to be specified by a Ministerial Decision shall have the capacity of officers of law to establish any infringements of the provisions of this Law and its Regulations. Accordingly, they are entitled to peruse the records, books and documents at the principal office of the company or the Capital Market or the place where these records are held. Officials in the above offices shall provide these officers with the data, statements, extracts and copies of the documents requested for this purpose.

a.       The Authority is empowered to carry out investigation as deemed necessary, upon the occurrence of an infringement of the provisions of the Law, the internal regulations or guidelines issued by the Authority. The Authority is entitled to request any person to submit a written statement with regard to the accompanying circumstances surrounding conditions relating to the infringement.

b.       The Executive President may form a committee consisting of senior staff of the Market or the Authority to carry out the necessary investigations to verify the infringement referred to the Authority. The Committee may invite any party to hear its statements on the subject matter. The Committee may also request that books, documents, correspondence, notices and other records are submitted for perusal as deemed necessary. Should any party fail to abide by notices addressed to it or refrain from providing the documents requested by the investigating committee, then enforcement shall take place with assistance of competent authorities in Oman.

The Board of Directors of the Authority shall issue a resolution forming an appeal committee comprising two senior judges at the Court of First Instance to be nominated by the Minister of Justice. The most senior one of them shall chair the committee, in addition to a third member to be nominated by the Oman Chamber of Commerce and Industry.

The Committee is authorised to hear the complaints made by the parties concerned against resolutions made by the Minister or the Executive President or the Authority pursuant to the provisions of this Law, its Regulations and any decisions made to enforce the same.

The period for dealing with a complaint shall be 30 days from the date of its notification unless otherwise specified. The decision of the Committee in respect of the complaint shall be final. The Regulations made under this Law shall set out the procedures to be followed by and before the Committee, in addition to any other applicable procedures.

*Amended by Royal Decree 18/2002

Article 62*

The Court of First Instance (Competent Circuit) shall swiftly settle disputes between the parties dealing in securities.

Article 63*

A.    The Board of Directors of the Authority shall form from among its members a Disciplinary Committee comprising of a chairman and two members to decide on any violation of the law and the regulations, decision, and guidelines thereof, which are imputed to companies dealing in securities, their agents, subsidiaries as well as companies whose securities are listed on the Market. The Disciplinary Committee may take any of the following disciplinary measures:

Whatever the case may be, the Committee shall refund the return of the violation to the damaged party, if any, otherwise it shall accrue to the Authority.

The decisions of the Committee shall not be enforced unless they have become final after the lapse of the deadline for an appeal as provided for in clause (b) hereon, or the settlement of the appeal.

The Executive President may, upon a recommendation by the Disciplinary Committee, suspend brokers and agents from trading on the Market for a period not exceeding two weeks. He may also issue a reminder or issue cautioning in respect of minor violations and his decision shall be final.

b.        The decisions made by the Disciplinary Committee may be appealed against before the Appeals Committee within 30 days from the date of notification to the relevant party. The decision made by the Committee in respect of such appeal shall be final.

c.        The Regulations shall set out the provisions relating to the procedures to be followed by and before the Committee including the manner in which the committee shall exercise its authority and issue its decisions

Any person who is proved to have had dealings in the Market on the basis of undeclared or unrevealed information, and was, by virtue of his position, aware of such information, or had spread rumours on the positions of any company for the purpose of  affecting the prices of its shares, shall be punished by imprisonment for a period of not less than 3 months and a penalty of not less than RO 10,000/- and not exceeding RO 50,000/- or either of them. These punishments shall also apply to the Chairman and members of the Board of Directors of any member company, its general manager, deputy general manager or any member of staff.

Any person who knowingly submits incorrect statements, declarations or information aiming to affect investors’ decisions in respect of whether or not to invest, shall be punished by imprisonment for a period of not less than one month and a penalty of not less than RO 10,000 and not exceeding RO 30,000, or both. The same punishment shall apply to the members of the Board of Directors, staff of the member company, the auditor and the authorised signatory of the intermediary company and the Underwriter.

Without prejudice to any more severer punishment provided in any other law:

1.       Any person who carries out any of the activities, provided for by this Law, without being to do so, or

2.       Any person who offers securities for subscription or receives monies in respect of them or otherwise breaches the provisions of this Law,

Shall be punished by imprisonment for a period not exceeding three years and a penalty of not less than RO. 5000, or either of them.

1. a) Any person who carries out any act in respect of Securities aimed at or resulting in the misleading of other dealers or creating a series of false or unreal transactions, aimed at making other dealers believe that the traded Security enjoys an active market; or

b) any person who, individually or in collusion with other persons or a group of persons, carries out any dealings in Securities deliberately aimed at stabilising the value of a certain Security, in a manner which contradicts the applicable laws, regulations and guidelines. shall be punished by a period of not less than 3 months and a penalty of not less than RO3,000 and not exceeding RO 10,000 or any of them.

2. All the founders of a general joint stock company, the auditors and any entity who participated in the preparation of the prospectus for a public subscription shall be punished by imprisonment for a period not exceeding two years and a penalty of not less than RO 10,000 and not exceeding RO 50,000 or any of them, if they were aware of the fact that the information set out in the prospectus was incorrect or if any material information was omitted from the prospectus or any false information was knowingly included in it.

3. A fine not less than R.O. 5000 and not exceeding R.O. 50000 shall be imposed on any one of the Directors of the Board or the Executive Management of the company, who breach the provisions of Article (10) or clause 10 of Article (50).

*Amended by Royal Decree 18/2002

Any infringement of the provisions of this Law or its Regulations or the Guidelines made by the Board of the Authority which may cause a damage to any person shall make the infringing party responsible for such damage.

In addition to the penalties specified for the above offences, the infringing party may be banned from practising his business or prohibited from practising the activity, being the subject matter of the offence, for a period not exceeding three years . If the same act is repeated then a judgement resulting in the same penalty is mandatory. 

Any party with a justified interest, may apply to the Authority to peruse the documents, records and minutes relating to a company and, for a fee specified by the Authority’s Board of Directors, obtain information or photocopies thereof. The Authority may reject such an application if the declaration of such information or photocopies is likely to cause damage to the company concerned or affect the public interest or the investors interests.

The Authority shall issue a monthly circular to the public with regard to the Authority’s activities. The circular shall include in particular details with regard to applications received, the resolutions passed by the Board of Directors, the final decisions and reports on any dealings carried out by the members of the Board of Directors of a joint stock company or its executive staff.