Article 20 bis of the Saudi Capital Market Law

This article was added to the law by Royal Decree No. (M/16) dated 19/1/1441 AH, and it concerns the Saudi Exchange (called the "Market" in Article 1).

Paragraph (a): the Market's objective

The Market's objectives include ensuring the fairness, adequacy and transparency of the following:

• listing requirements;
• trading rules and their technical mechanisms;
• information on securities listed on the Market.

Paragraph (b): prohibition on distributions without approval

The Market is prohibited from making cash or in-kind distributions to its members as dividends without the approval of the board, meaning the board of the Capital Market Authority as defined in Article 1. The distribution is therefore not prohibited absolutely, but is conditional on the board's approval.

Relationship with Article 20

Article 20, in the text as presented, contains similar provisions: the same objective in paragraph (c/1) and the same prohibition in paragraph (d), together with other provisions such as the establishment of the Market as a joint stock company, as the only body authorized to carry on securities trading in the Kingdom, and other objectives relating to settlement and clearing and the standards for brokers. The text as presented does not show how the addition relates to the amendments to Article 20 itself, so the official sources should be consulted to determine the full text in force for both articles.